Diamondback Energy Services Cancels Ipo

Diamondback energy services cancels ipo

Table of Contents

As filed with the Securities and Exchange Commission on November 20, 2007

Registration No. 333-138599


UNITED STATES SECURITIES AND EXCHANGE

COMMISSION

WASHINGTON, D.C. 20549


AMENDMENT NO. 4

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933


Diamondback Energy Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware

1389

20-5848083

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S.

Employer

Identification Number)


14301 Caliber Dr.

Suite 200

Oklahoma City, Oklahoma73134

(405) 242-4080

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)


Arty Straehla

Chief Executive Officer

Diamondback Energy Services, Inc.

14301 Caliber Dr.

Suite 200

Oklahoma City, Oklahoma73134

(405) 242-4080

(Name, address, including zip code, and telephone number, including area code, of agent for service)


Copy to:

Seth R. Molay, P.C.

Akin Gump Strauss Hauer & Feld LLP

1700 Pacific Avenue, Suite 4100

Dallas, TX75201

(214) 969-4780


Approximate date of commencement of proposed sale to the public:    As soon as practicable after this Registration Statement is declared effective.

If any securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box. ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨


The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.



Table of Contents

The information in this prospectus is not complete and may be changed.

We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where such offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED NOVEMBER 20, 2007.

PROSPECTUS

                     Shares

Common Stock

We are offering              shares of our common stock.

This is our initial public offering and no public market currently exists for our common shares. We anticipate that the initial public offering price will be between $             and $             per common share.

Forex dream time dashborad

We have applied for the quotation of our common stock on The NASDAQ Global Market under the symbol “FANG.”

Investing in our common stock involves a high degree of risk.

Please read “ Risk Factors” beginning on page 8.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


PER SHARETOTAL

Public Offering Price.

$            $            

Underwriting Discounts and Commissions.

$            $            

Proceeds to Diamondback Energy Services, Inc.

(Before Expenses).

$            $            

Delivery of the common shares is expected to be made on or about             .

Binary options basics 101

The underwriters have an option to purchase an additional              common shares from us to cover overallotments.

Prospectus dated                     , 2007.


Table of Contents


Table of Contents

Table of Contents


About This Prospectus

You should rely only on the information contained in this prospectus.

We have not authorized any other person to provide you with information different from that contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it.

Navigate Gulfport Energy Corporation

We are only offering to sell, and only seeking offers to buy, the common stock in jurisdictions where offers and sales are permitted.

The information contained in this prospectus is accurate and complete only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

Our business, financial condition, results of operations and prospectus may have changed since that date.

This prospectus includes market share and industry data and forecasts that we obtained from internal company surveys, publicly available information and industry publications and surveys.

Our internal research and forecasts are based on management’s understanding of industry conditions, and such information has not been verified by independent sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable.

Unless the context otherwise requires, the information in the prospectus (other than in the historical financial statements) assumes that the underwriters will not exercise their over-allotment option.

i


Table of Contents

Summary

This summary contains basic information about us and a brief overview of key aspects of this offering.

Because it is a summary, it does not contain all of the information you should consider before investing in our common stock. You should read and carefully consider the entire prospectus, including “Risk Factors” and our consolidated financial statements and related notes included elsewhere in this prospectus, before you decide whether to invest in our common stock.

Please also read “Glossary of Oil and Natural Gas Terms” included in this prospectus for definitions of certain terms that are commonly used in the oilfield services industry.

Diamondback Energy Services, Inc.

Our Company

We are a diversified oilfield services company focused on providing technology-driven solutions to maximize the recovery and present value of oil and natural gas production streams.

Our services focus on enhancing drilling and production for our customers, and encompass the life-cycle of the well, from drilling and completion through stimulation, production and eventual abandonment. They include drilling technology services and applications, stimulation and pumping services, fluid logistics and well-site services and completion and production services.

Our business is focused in both proven oil and natural gas basins and emerging high-growth resource plays in Texas, Oklahoma, Louisiana, Arkansas, Appalachia and the Rocky Mountains.

Resource play is a term used to describe an accumulation of hydrocarbons known to exist over a large area that typically has lower average decline rates than other producing areas. We believe that the services we provide are critical in increasing the ultimate recovery and present value of production streams from resource plays. The majority of our operations are located in the Barnett Shale in Texas, the Anadarko Basin, the Woodford Shale and other basins across Oklahoma.

Our operations commenced in December 2005 with the acquisition of substantially all of the assets of Quantum Drilling Motors, L.L.C., a directional drilling technology company based in Oklahoma City, Oklahoma. We have since grown rapidly through acquisitions and organic growth, particularly in our directional drilling technology and stimulation and pumping segments.

Our key field managers have an average of over 25 years of oilfield service experience and bring valuable basin-level expertise and long-term customer relationships with large independent exploration and production companies to our business. For the year ended December 31, 2006 and the nine months ended September 30, 2007, our top three customers were Chesapeake Energy Corp., EOG Resources Inc. and Devon Energy Corporation.

We currently conduct our operations through the following four business segments:

Drilling Technology Services and Applications. Our drilling technology services and applications are designed to allow our customers to reach the intended total well depth faster and with more precision, thus improving well economics.

Our services include providing performance drilling motors, MWD (Measurement While Drilling technology), shock subs services, wireline steering tool services, gyro survey services, underbalanced drilling services, electronic magnetic guidance tool rental and services and single shot guidance tool services, as well as providing advanced technical drilling expertise. We currently provide drilling technology services and applications in the Granite Wash, Permian Basin, Barnett Shale and the Gulf Coast regions of Texas, the Powder River, Jonah, Uintah, Williston and Piceance Basins in the Rocky Mountains, the Trenton/Black River play, Marcellus Shale, Antrim Shale, Niagaran Reef Trend, New Albany Shale, Lower Huron Shale and Cleveland Shale in the Appalachia region, the Fayettville Shale in Arkansas and across Oklahoma.

Stimulation and Pumping Services. Our stimulation and pumping services consist of pressure pumping and water transfer services.

As part of our pressure pumping services, we provide hydraulic fracturing, acidizing and cementing services. These services are used in maximizing hydrocarbon flow paths and in the drilling, completing and plugging of wells.

What cryptocurrencies deal with real estate

Currently, we operate stimulation and pumping services primarily in Oklahoma and Texas, including the Barnett Shale.

1


Table of Contents

Fluid Logistics and Well-Site Services. Our fluid logistics services include storage, transportation and disposal of fluids used in or produced by drilling and subsequent stimulation and production operations.

Our well-site services include building drilling locations, pits and access roads. We currently provide fluid logistics and well-site services in the Barnett Shale, the Texas panhandle and across Oklahoma.

Completion and Production Services. Our completion and production services include completion and roustabout services, rental and sale of downhole equipment and tools and plugging and abandonment services.

We currently provide completion and production services in Texas, Oklahoma and Louisiana.

Our operations commenced in December 2005. On a pro forma basis, we had $174.1 million in revenue and $38.9 million in EBITDA for the year ended December 31, 2006 and $229.6 million in revenue and $47.2 million in EBITDA for the nine months ended September 30, 2007. For a definition of EBITDA, a reconciliation of EBITDA to net income and a discussion of EBITDA as a performance measure, please see “Summary—Summary Financial Data” and “Selected Historical Financial Data.” For information regarding pro forma adjustments, see “Unaudited Pro Forma Combined Statements of Operations.”

Our Industry

We believe that the following trends in our industry should benefit our operations:

Need for additional drilling activity to maintain equal levels of production. Even though the number of U.S.

natural gas wells drilled has increased over the past ten years, overall levels of production have declined. Given average decline rates and demand forecasts, we believe that the number of wells drilled is likely to continue to increase in coming years.

Oil and Gas Midstream Services Unit of Diamondback, Rattler Midstream IPO

Once a well has been drilled, it requires recurring production and completion services, which drives demand for our products and services.

Increasing percentages of exploration and production budgets focused on development activities. Large U.S.

exploration and production companies are increasingly directing their capital budgets away from exploration-related activity and towards lower-risk development activity. Much of this development-related activity occurs in resource play areas and requires using advanced directional drilling and fracturing and stimulation services to enhance production from existing reserves.

Company History

Trend towards drilling and developing unconventional oil and natural gas resources. As a result of improvements in drilling and production-enhancement technologies, oil and natural gas companies are increasingly developing unconventional hydrocarbon resources such as tight sands, shales and coalbed methane, or CBM, resources.

Successful and economic production of these resource plays frequently requires directional drilling and fracturing and stimulation services, and drilling-related activity is done on tighter acre-spacing and thus requires that more wells be drilled relative to conventional resources.

All of these characteristics drive utilization of our products and services.

High demand for oil and natural gas in North America. Demand for oil and natural gas in the United States has increased in recent years, and outpaced domestic supply. This domestic supply and demand imbalance, coupled with geopolitical instability and limited supply responses, has resulted in significant increases in exploration and development activities in the United States in recent years.

Our Strategy

Our strategy is to provide our customers with technology-driven drilling, stimulation and production services designed to optimize the ultimate recovery and present value of hydrocarbon reserves.

CBS Cancels Radio IPO

Our services span the life-cycle of a well which we believe provides cost efficiencies for our customers. Specifically, we intend to:

Maintain a portfolio of operations in proven oil and natural gas markets and emerging resource plays. Our core operations are focused in proven producing regions, primarily in the Permian Basin in Texas and the Anadarko Basin in Oklahoma and in emerging and high-growth resource plays, primarily in the Barnett Shale in Texas, the Woodford Shale in Oklahoma and Appalachia.

By operating in multiple locations and markets, many with different geological characteristics, we create a diverse portfolio of operations, thereby reducing our dependence on individual basins.

2


Table of Contents

Leverage our experienced field management and basin-level expertise. We seek to manage our business as close to our customer base as possible. We intend to leverage our field management and its basin- and field-level expertise to deliver innovative, basin-specific solutions to our customers.

Provide technology-driven solutions for our customers. Through the development and implementation of customized solutions, we intend to continue to provide technology-driven services to our customers that help reduce their costs and increase their production, thereby creating operational efficiencies.

Capitalize on organic growth opportunities. We intend to use our existing customer relationships to expand opportunistically to other geographic regions in which our customers have operations. We also plan to continue to focus on expanding our technology-driven segments, including directional drilling and pressure pumping services, which we believe provide strong opportunities for growth.

Expand through strategic acquisitions. To complement our organic growth, we intend to continue to pursue strategic acquisitions that can meet our targeted returns on invested capital. We believe this strategy will allow us to continue to expand our customer base, geographic footprint and service offering.

Integrate and cross sell our services. We will continue to offer a broad range of products and services, which will give us the opportunity to cross-sell services to our customers. We seek to provide multiple services to create operational efficiencies for each of our customers.

Our Strengths

We believe that the following strengths position us well within our industry and will help us successfully execute our strategy:

Long-term, basin-level relationships with a stable customer base. Our customers include large independent oil and natural gas exploration and production companies.

For the year ended December 31, 2006 and the nine months ended September 30, 2007, our top customers included Chesapeake Energy Corp., EOG Resources Inc., Devon Energy Corp., Cimarex Energy Company, Range Resources Corporation, Continental Resources, Inc. and Newfield Exploration Co. We believe that the long-term relationships that our key field managers have developed with these and other customers help provide us with a stable and growth-oriented client base.

Diamondback energy services cancels ipo

Experienced management team. Our key field managers have an extensive track record in the oilfield services business and an average of over 25 years of oilfield services experience. We believe their knowledge of our industry and business lines enhances our ability to provide superior customer service.

In addition, our field managers have extensive expertise in the geological basins in which they operate and understand the regional challenges our customers face, which we believe strengthens our relationships with our customers.

New, technologically-advanced equipment. Our service fleet is predominantly comprised of new, technologically-advanced equipment, providing better quality of service and operational efficiencies than older equipment.

We have recently expanded our fleet with new equipment, including directional drilling and stimulation and pressure pumping equipment, all of which, if ordered today, would have long lead times.

Operating platforms in proven oil and natural gas markets and key resource plays. We operate in both proven oil and natural gas markets and key resource plays in Texas, Oklahoma, Louisiana, Arkansas, Appalachia and the Rocky Mountains.

We believe our operating platforms in Texas and Oklahoma provide a stable revenue stream for our business, as drilling and production activity in these regions is less sensitive to hydrocarbon prices, and complements our operations in emerging and high-growth resource plays like the Barnett and Woodford Shales.

Multi-cycle operating leverage. We offer a broad range of products and services that span the life-cycle of a well.

These include pre-drilling activities with our well-site preparation, drilling with our downhole, horizontal and directional drilling technologies, well-sustaining activities such as fluid logistics and recovery optimization, completion-related fracturing and stimulation services and abandonment activities.

We are not excessively dependent on any one particular aspect of the exploration and production cycle.

Platform for future consolidation and growth. We have a proven track record of completing acquisitions.

The market in which we operate is highly fragmented, and our senior management team continues to identify potential acquisition opportunities.

3


Table of Contents

Our Challenges

We face a number of challenges in implementing our strategy. For example:

We derive our revenues from companies in the oil and natural gas exploration and production industry, a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility of oil and natural gas prices.

A material reduction in the levels of exploration and development activities in our market areas could affect our business.

We operate in a highly competitive industry in which price competition can be intense.

We intend to grow our business, particularly our drilling technology and pressure pumping segments, and risk being unable to secure equipment and crews to successfully execute our plans.

We will continue to implement processes and procedures to accommodate our recent growth.

Competition for experienced oilfield service personnel is intense, and we face significant challenges in competing for crews and management with large and well-established competitors.

Our business depends upon our ability to obtain specialized equipment and parts from third party suppliers, including companies controlled by our equity sponsor described below, and we may be vulnerable to delayed deliveries and future price increases.

For further discussion of these and other challenges we face, see “Risk Factors” beginning on page 8.

Our Equity Sponsor

We were formed by affiliates of Wexford Capital LLC, which we refer to as Wexford. Wexford is a Greenwich, Connecticut based SEC registered investment advisor. Wexford has made private equity investments in many different industries, with particular expertise in the energy and natural resources sectors.

Cramer: It's hard to justify owning the oil stocks here

Prior to this offering, Wexford will beneficially own all of our outstanding common stock. Upon completion of the offering, Wexford will continue to beneficially own approximately         % of our common stock (approximately         % if the overallotment option is exercised in full).

Diamondback energy services cancels ipo

Our History

Commencing in 2005, Diamondback Energy Services LLC, or Services LLC, began to target investment opportunities in service-oriented companies in the oil and natural gas industry. During the period October 2005 through March 2006, Services LLC acquired the assets of or equity interests in 20 companies.

Services LLC owned these acquired assets, entities and operations, as well as its newly established business operations, through 13 direct, wholly-owned subsidiaries and 12 indirect subsidiaries. Effective as of December 31, 2006, ten of the direct, wholly-owned subsidiaries and all of the indirect subsidiaries were transferred to our parent, Diamondback Holdings, LLC, a wholly owned subsidiary of Services LLC, which we refer to as Diamondback Holdings, in a transaction that we refer to as the transfer.

Diamondback energy services cancels ipo

Subsequent to December 31, 2006, Diamondback Holdings completed two acquisitions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—The Acquisitions.” Diamondback Holdings will be merged with Diamondback Energy Services, Inc. immediately prior to the closing of this offering in a transaction that we refer to as the merger. Immediately after the merger, Services LLC will own all of our then outstanding common stock.

Diamondback Energy Services, Inc.

Diamondback energy services cancels ipo

was formed as a Delaware corporation in November 2006 and will not conduct any material business operations prior to the merger. The descriptions contained in this prospectus give effect to the transfer and the merger.

Except as otherwise indicated or required by the context, all references in this prospectus to “Diamondback,” the “Company,”“we,”“us” or “our” are to Diamondback Energy Services, Inc., Diamondback Holdings and the business and assets of the transferred subsidiaries.

Diamondback energy services cancels ipo

Services LLC and Diamondback Holdings are controlled by Wexford. See “—Our Equity Sponsor.”

Our Offices

Our principal executive offices are located at 14301 Caliber Drive, Suite 200, Oklahoma City, Oklahoma73134, and our telephone number is (405) 242-4080. Our website address is www.diamondbackenergy.com. Information contained on our website does not constitute part of this prospectus.

4


Table of Contents

The Offering

Common stock offered by us

             shares

Common stock to be outstanding immediately after completion of this offering (1)

             shares

Use of proceeds

We intend to use the net proceeds of this offering to repay outstanding indebtedness.

See “Use of Proceeds.”

Dividend policy

We currently anticipate that we will retain all future earnings, if any, to finance the growth and development of our business. We do not intend to pay cash dividends in the foreseeable future.

NASDAQ Global Market symbol

“FANG”


(1)The number of shares of our common stock to be outstanding after this offering includes              shares of common stock that will be issued under our 2007 Equity Incentive Plan in connection with this offering.

Diamondback energy services cancels ipo

Shares of common stock issued under our 2007 Equity Incentive Plan will be issued to officers and employees without consideration and will vest in six approximately equal installments every six months over a three-year period (the requisite service period) beginning on the six-month anniversary of the grant date.

Nonvested shares are deemed issued and outstanding from a legal perspective; however, under U.S. generally accepted accounting principles, or GAAP, only vested shares are included in basic shares outstanding. Also, under GAAP, nonvested shares are included in diluted shares outstanding when the effect is dilutive.

See “Management – 2007 Equity Incentive Plan.”

5


Table of Contents

Summary Financial Data

The following table sets forth summary historical and pro forma financial data as of and for each of the periods indicated.

The summary historical data as of and for the 11 months ended November 30, 2005 are derived from the historical audited financial statements of Quantum Drilling Motors, L.L.C.

About Diamondback

(Quantum), our predecessor. The summary historical data as of and for the period ended December 31, 2005 and as of and for the year ended December 31, 2006 are derived from our historical audited consolidated financial statements for such periods. The summary historical data as of and for the nine months ended September 30, 2006 and 2007 are derived from our historical unaudited financial statements for such periods.

The pro forma financial data give effect to the acquisitions as if they had been completed on January 1, 2006 and give effect to income taxes assuming we were operated as a taxable corporation throughout the periods, as described in “Unaudited Pro Forma Combined Statements of Operations”.

Such data do not necessarily indicate what our operating results or financial position would have been had the acquisitions actually been completed on such date or had we been a taxable entity for all periods.

Diamondback Energy higher after IPO

Operating results for the year ended December 31, 2006, the nine months ended September 30, 2007 and other historical and pro forma periods presented are not necessarily indicative of results that may be expected for the remainder of 2007 or any future periods.

You should review this information together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”“Selected Historical Financial Data,”“Unaudited Pro Forma Combined Statements of Operations” and our consolidated historical financial statements and related notes and Quantum’s historical financial statements and related notes included elsewhere in this prospectus.


(In thousands, except per share data)
11 Months
Ended
November 30,
2005
Period from
September 29,
2005 (Inception)
to December 31,
2005 (1)
Year Ended
December 31,
2006 (1)
Nine Months Ended
September 30,
Pro Forma
Year Ended
December 31,
2006
Pro Forma
Nine Months
Ended
September 30,
2007
2006 (1)2007 (1)
Predecessor (2)

Statements of Operations Data

Revenue:

Drilling technology services and applications

$21,586$2,501$52,132$35,287$57,563$69,474$72,029

Stimulation and pumping services

28,54116,30586,29428,54186,294

Fluid logistics and well-site services

65,74046,27757,89065,74057,890

Completion and production services

9,4876,44913,38510,35313,385

Total