UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-K/A

(Mark One)

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

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

FOR THE TRANSITION PERIOD FROM                      TO                     

ALLIS-CHALMERS ENERGY INC.

Delaware (State or other jurisdiction of incorporation or organization)		39-0126090 (I.R.S. Employer Identification No.)
5075 WESTHEIMER, SUITE 890 HOUSTON, TEXAS (Address of principal executive offices)		77056 (Zip code)

(713) 369-0550
Registrant’s telephone number, including area code

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Security:		Name of Exchange:
Common Stock, par value $0.01 per share		New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d). Yes o No þ

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 it corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 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 o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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. (Check one):

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

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

The aggregate market value of the common equity held by non-affiliates of the registrant, computed using the closing price of the common stock of $17.80 per share on June 30, 2008, as reported on the New York Stock Exchange, was approximately $372,126,700 (affiliates included for this computation only: directors, executive officers and holders of more than 5% of the registrant’s common stock).

As of April 5, 2009 there were 35,687,288 shares of common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:
None

 

 

Explanatory Note

The purpose of this Amendment No. 1 on Form 10-K/A (the “Amendment”) is to amend and restate Part III, Items 10 through 14 of our previously filed Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities Exchange Commission, or SEC, on March 9, 2009 (the “Original Form 10-K”), to include information previously omitted in reliance on General Instruction G to Form 10-K, which provides that registrants may incorporate by reference certain information from a definitive proxy statement prepared in connection with the election of directors. Allis-Chalmers Energy Inc. has determined to include such Part III information by amendment of the Original Form 10-K rather than by incorporation by reference to the proxy statement. Accordingly, Part III of the Original Form 10-K is hereby amended and restated as set forth below.

As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, new certifications by our Chief Executive Officer and Chief Financial Officer are being filed as exhibits to this Amendment No. 1 on Form 10-K/A under Item 15 of Part IV.

There are no other changes to the Original Form 10-K other than those outlined above. This Amendment does not reflect events occurring after the filing of the Original Form 10-K, nor does it modify or update disclosures therein in any way other than as required to reflect the amendment set forth below.

As used herein, “Allis-Chalmers”, “we”, “our” and “us” may refer to Allis-Chalmers Energy Inc. or its subsidiaries. The use of these terms is not intended to connote any particular corporate status or relationships.

TABLE OF CONTENTS

		Page
PART III
Item 10. Directors, Executive Officers and Corporate Governance			- 2 -
Item 11. Executive Compensation			- 6 -
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			- 24 -
Item 13. Certain Relationships and Related Transactions, and Director Independence			- 27 -
Item 14. Principal Accounting Fees and Services			- 28 -
PART IV
Item 15. Exhibits, Financial Statement Schedules			- 29 -
Signatures and Certifications			- 30 -
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information Regarding Directors

Upon the closing of our acquisition of DLS Drilling, Logistics & Services Corporation, or DLS, in August 2006, we entered into an investors rights agreement, which provides, among other things, that the sellers of DLS have the right to designate two nominees for election to our board of directors. Effective upon the closing of the DLS acquisition, the DLS sellers (pursuant to their rights as set forth in the investors rights agreement) designated Alejandro P. Bulgheroni and Carlos A. Bulgheroni as nominees to the board. In accordance with the provisions of the investors rights agreement, the board appointed Alejandro P. Bulgheroni and Carlos A. Bulgheroni to the board upon receipt of the nominations and both directors have been re-elected every year since such appointment. Alejandro P. Bulgheroni and Carlos A. Bulgheroni are brothers. Effective April 7, 2009, Carlos A. Bulgheroni resigned as a member of the board of directors. At this time, the DLS sellers have not designated a replacement nominee for Carlos A Bulgheroni.

Set forth below is biographical information for each current director.

Name		Age		Director Since
Ali H. M. Afdhal		64		September 2006
Munir Akram		64		September 2008
Alejandro P. Bulgheroni		65		August 2006
Victor F. Germack		69		January 2005
James M. Hennessy		60		April 2007
Munawar H. Hidayatallah		64		May 2001
John E. McConnaughy, Jr.		79		May 2004
Robert E. Nederlander		76		May 1989
Zane Tankel		69		February 2007
Leonard Toboroff		76		May 1989

Ali H. M. Afdhal was appointed to our board of directors on September 12, 2006. Since 2001, Mr. Afdhal has operated and managed his family’s international and agricultural interests. Mr. Afdhal is a graduate of The Institute of Chartered Accountants in England and Wales.

Munir Akram was appointed to our board of directors on September 19, 2008. Mr. Akram served as the Ambassador of Pakistan to the United Nations from 1988 through 2008. Mr. Akram has represented Pakistan in numerous United Nations bodies and international conferences, including the Security Council, the Economic and Social Council, the Conference on Disarmament, the UN Conference on Trade and Development, and the World Trade Organization. From 1995 to 2002, Mr. Akram represented Pakistan as Permanent Representative to the United Nations in Geneva (1995-2002) and later in New York (2002-2008). Prior to that, he filled a number of important diplomatic positions, such as Deputy Foreign Secretary in Pakistan’s Ministry of Foreign Affairs (1992-1995); Ambassador of Pakistan to the European Community, Belgium and Luxembourg (1988-1992); Director for United Nations, Economic Cooperation and Policy Planning, Ministry of Foreign Affairs (1985-1988); and as Minister/Counselor in Pakistan’s Embassy to Japan (Tokyo, 1982-1985). Mr. Akram is a prolific writer and has lectured widely on various strategic, political and economic issues. In addition, Mr. Akram holds Masters of Arts and Bachelor of Law degrees from Karachi University.

Alejandro P. Bulgheroni was appointed to our board of directors on August 14, 2006. Mr. Bulgheroni has served as the Chairman of the Management Committee of Pan American Energy LLC, an oil and gas company, since November 1997. He also served as the Chairman of Bridas SAPIC from 1988 until 1997. He has served as Vice-Chairman and Executive Vice-President of Bridas Corporation since 1993. He also serves as Chairman, President and CEO of Associated Petroleum Investors Ltd., an international oil and gas holding company, as Chairman and President of Global Oilfield Holdings Ltd., as Chairman of Beusa Energy, Inc. and as President and CEO of Nuevo Manantial S.A and Agroland S.A.. Mr. Bulgheroni is a member of the Petroleum and Gas Argentine Institute and of the Society of Petroleum Engineers (USA), Vice-President of the Argentine Chamber of Hydrocarbons Producers (CEPH), Vice-President of the Argentine-Uruguayan Chamber of Commerce, Counselor of the Argentine Business Council for Sustainable Development (CEADS) and Vice-President of the Educando Foundation (Argentina). Mr. Bulgheroni is a graduate of the University of Buenos Aires with a degree in Industrial Engineering.

Victor F. Germack was appointed to our board of directors in January 2005. Mr. Germack has served since 1980 as President of Heritage Capital Corp., a company engaged in investment banking services. In addition, Mr. Germack formed, and since 2002 has been President of, RateFinancials Inc., a company that analyzes and ranks the financial reporting of U.S. public companies.

James M. Hennessy was appointed to our board of directors in April 2007. Mr. Hennessy served as President and Chief Executive Officer of ING Funds, a United States mutual fund business of ING Group, from 2001 through 2006. While with ING Funds, Mr. Hennessy oversaw approximately 216 mutual funds with an aggregate of approximately $92 billion in assets under management. From 2003 through 2007, Mr. Hennessy also served on the board of governors of the Investment Company Institute, which is the national trade association for the mutual fund industry, representing most of the industry’s assets. Mr. Hennessy is currently on the board of directors of Natural Lighting Company and Munder Capital Holdings, LLC and is a member of the advisory board of the law, science and technology LLM program of Arizona State University Law School. In addition, Mr. Hennessy has a law degree from New York University.

Munawar H. Hidayatallah has served as our Chairman of the Board and Chief Executive Officer since May 2001, and was President from May 2001 through February 2003. Mr. Hidayatallah was Chief Executive Officer of OilQuip Rentals, Inc., from its formation in February 2000 until it merged with us in May 2001. From December 1994 until August 1999, Mr. Hidayatallah was the Chief Financial Officer and a director of IRI International, Inc., which was acquired by National Oilwell, Inc. in early 2000. IRI International, Inc. manufactured, sold and rented oilfield equipment to the oilfield and natural gas exploration and production sectors. From August 1999 until February 2001, Mr. Hidayatallah worked as a consultant to IRI International, Inc. and Riddell Sports Inc.

John E. McConnaughy, Jr. was appointed to our board of directors in May 2004. Mr. McConnaughy has served as Chairman and Chief Executive Officer of JEMC Corporation, a personal holding company, since he founded it in 1985. His career includes positions of management with Westinghouse Electric and the Singer Company, as well as service as a director of numerous public and private companies. In addition, he previously served as Chairman and Chief Executive Officer of Peabody International Corp. and Chairman and Chief Executive Officer of GEO International Corp. He retired from Peabody in February 1986 and GEO in October 1992. Mr. McConnaughy currently serves on the boards of Wave Systems Corp. and Arrow Resources Development Inc.

Robert E. Nederlander has served as our director since May 1989. Mr. Nederlander served as our Chairman of the board of directors from May 1989 to 1993, and as our Vice Chairman of the board of directors from 1993 to 1996. Mr. Nederlander was a Director of Cendant Corp. from December 1997 and Chairman of the Corporate Governance Committee of Cendant Corp. from 2002 until he resigned in 2006 when he became a director of Realogy Corporation, a public company which was a spinoff from Cendant Corp. Mr. Nederlander resigned as a director of Realogy Corporation on April 10, 2007, when the company was sold. Mr. Nederlander was a director of HFS, Inc. from July 1995 to December 1997. Since November 1981, Mr. Nederlander has been President and/or Director of the Nederlander Organization, Inc., owner and operator of legitimate theaters in New York City. Since December 1998, Mr. Nederlander has been a managing partner of the Nederlander Company, LLC, operator of legitimate theaters outside New York City. Mr. Nederlander was Chairman of the board of directors of Varsity Brands, Inc. (formerly Riddell Sports Inc.) from April 1988 to September 2003 and was the Chief Executive Officer of such corporation from 1988 through April 1, 1993. Mr. Nederlander has been a limited partner and a director of the New York Yankees since 1973. Mr. Nederlander has been President of Nederlander Television and Film Productions, Inc. since October 1985. In addition, Mr. Nederlander was Chairman of the Board and Chief Executive Officer of Mego Financial Corp. from January 1988 to January 2002, when he sold his stock interest and resigned.

Zane Tankel has served as our director since February 2007. Mr. Tankel is currently Chief Executive Officer of Apple-Metro, Inc., the New York Metropolitan Area franchisee for Applebee’s Neighborhood Grill & Bar, and has been the Chairman of the Board of Apple-Metro, Inc. and Chevys Fresh Mex Restaurants since 1994. Mr. Tankel also serves as a member of the board of directors of Mortons Restaurant Group, Inc. and Caribbean Restaurant LLC. Mr. Tankel has also served as Chairman of the Board of the Metro Chapter of the Young Presidents Organization and was a founder of the advisory board for the Boys and Girls Choir of Harlem. Mr. Tankel is a graduate of the University of Pennsylvania’s Wharton School of Business.

Leonard Toboroff has served as our director and Vice Chairman of the board of directors since May 1989 and served as our Executive Vice President from May 1989 until February 2002. Mr. Toboroff served as a director and Vice President of Varsity Brands, Inc. (formerly Riddell Sports Inc.) from April 1988 through October 2003, and he is also a director of Engex Corp, Novoste Corporation and Special Purpose Acquisition Corporation. Mr. Toboroff has been a practicing attorney continuously since 1961.

Information Regarding Executive Officers

The following table sets forth the names, ages and positions of each of our current executive officers, all of whom serve at the request of our board of directors and are subject to annual appointment by the board of directors:

Name		Age		Position
Munawar H. Hidayatallah		64		Chairman and Chief Executive Officer
Victor M. Perez		55		Chief Financial Officer
Theodore F. Pound III		54		General Counsel and Secretary
Bruce Sauers		45		Vice President and Corporate Controller
Terrence P. Keane		57		Senior Vice President—Oilfield Services
Mark C. Patterson		50		Senior Vice President—Rental Services
David K. Bryan		52		President and Chief Executive Officer of Strata Directional Technology LLC
Steven Collins		57		President of Allis-Chalmers Production Services LLC
Gary Edwards		57		President of Allis-Chalmers Tubular Services LLC
John A. Meyers		48		President of AirComp LLC

Munawar H. Hidayatallah has served as our Chairman of the Board and Chief Executive Officer since May 2001, and was President from May 2001 through February 2003. Mr. Hidayatallah was Chief Executive Officer of OilQuip Rentals, Inc. from its formation in February 2000 until it merged with us in May 2001. From December 1994 until August 1999, Mr. Hidayatallah was the Chief Financial Officer and a director of IRI International, Inc., which was acquired by National Oilwell, Inc. in early 2000. IRI International, Inc. manufactured, sold and rented oilfield equipment to the oilfield and natural gas exploration and production sectors. From August 1999 until February 2001, Mr. Hidayatallah worked as a consultant to IRI International, Inc. and Riddell Sports Inc.

Victor M. Perez became our Chief Financial Officer in August 2004. From July 2003 to July 2004, Mr. Perez was a private consultant engaged in corporate and international finance advisory. From February 1995 to June 2003, Mr. Perez was Vice President and Chief Financial Officer of Trico Marine Services, Inc., a marine transportation company serving the offshore energy industry. Trico Marine Services, Inc. filed a petition under the federal bankruptcy laws in December 2004. Mr. Perez was Vice President of Corporate Finance with Offshore Pipelines, Inc., an oilfield marine construction company, from October 1990 to January 1995, when that company merged with a subsidiary of McDermott International. Mr. Perez also has 15 years of experience in international energy banking.

Theodore F. Pound III became our General Counsel in October 2004 and was elected Secretary in January 2005. For ten years prior to joining us, he practiced law with the law firm of Wilson, Cribbs & Goren, P.C., Houston, Texas. Mr. Pound has more than 27 years of experience in corporate law. Mr. Pound has represented us and managed each of our acquisitions beginning in 2001 when Allis-Chalmers moved into the oilfield services industry.

Bruce Sauers has served as our Vice President and Corporate Controller since July 2005. From January 2005 until July 2005, Mr. Sauers was Controller of Blast Energy Inc., an oilfield services company. From June 2004 until January 2005, Mr. Sauers worked as a financial consultant. From July 2003 until June 2004, Mr. Sauers served as controller for HMT, Inc., an above ground storage tank company. From February 2003 until July 2003, Mr. Sauers served as assistant controller at Todco, an offshore drilling contractor. Mr. Sauers has served in a financial management role for approximately 20 years.

Terrence P. Keane became Senior Vice President—Oilfield Services in January 2008. Prior to his promotion, Mr. Keane served as President and Chief Executive Officer of AirComp since its formation on July 1, 2003. In addition, Mr. Keane served as a consultant to M-I LLC in the area of compressed air drilling from July 2002 until June 2003. From March 1999 until June 2002, Mr. Keane served as Vice President and General Manager — Exploration, Production and Processing Services for Gas Technology Institute where Mr. Keane was responsible for all sales, marketing, operations and research and development in the exploration, production and processing business unit. For 15 years prior to joining the Gas Technology Institute, Mr. Keane held various positions with Smith International, Inc., Houston, Texas, most recently in the position of Vice President Worldwide Operations and Sales for Smith Tool.

Mark C. Patterson is Senior Vice President—Rental Services and President of Allis-Chalmers Rental Services LLC. Prior to such time, Mr. Patterson served as Executive Vice President of Sales and Business Development for Allis-Chalmers Rental Services LLC, organizing, managing and coordinating the sales effort for the company. Mr. Patterson also previously worked for Oil & Gas Rental Services, Inc. from August 1989 through December 2006 and has over 18 years experience in the rental service business and over 27 years experience in the oil and gas service sector of the oil and gas industry. While with Oil & Gas Rental Services, Inc., Mr. Patterson served as Vice President of Sales in Houston, managing the Houston sales and marketing efforts.

David K. Bryan has served as President and Chief Executive Officer of Strata Directional Drilling LLC, our directional drilling segment, since February 2005. Mr. Bryan served as Vice President of Strata from June 2002 until February 2005. From February 2002 to June 2002, he served as General Manager, and from May 1999 through February 2002, he served as Operations Manager of Strata. Mr. Bryan has been involved in the directional drilling sector since 1979.

Steven Collins has served as President of Allis-Chalmers Production Services LLC, or Production Services, since December 2005. Mr. Collins was our corporate Vice President of Sales and Marketing from June 2005 to December 2005. From 2002 to 2005, Mr. Collins served as Sales Manager of Well Testing and Corporate Strategic Accounts Manager for TETRA Technologies. From 1997 to 2002, Mr. Collins was in sales for Production Well Testers. Mr. Collins has over 25 years’ experience in various sales and management positions in the oilfield services industry.

Gary Edwards has served as President of Allis-Chalmers Tubular Services LLC, or Tubular, since December 2005 after serving as Executive Vice President of Tubular since September 2005. From April 1997 to September 2005, Mr. Edwards served as Operations Manager for International Hammer/Spindletop Tubular Services, a division of Patterson Services, Inc. Mr. Edwards has been in the casing and tubing industry for the past 29 years.

John A. Meyers was appointed President of AirComp LLC in January 2008. Prior to such appointment, Mr. Meyers served as Vice President of Percussion Drilling Systems for AirComp LLC from November 2006. Mr. Meyers has also served in several managerial roles within the company that have included Engineering, Manufacturing and Product Management responsibilities. Mr. Meyers has over 25 years experience in the oilfield service industry including 20 years with Smith International and Halliburton where he had Field Engineering responsibilities for Roller Cone and PDC Bits, Directional Drilling, Down-hole Motors, MWD and Air Percussion tools. Mr. Meyers holds several US Patents pertaining to air hammers and bits and has written numerous industry papers on percussion drilling.

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Exchange Act, directors, certain officers, and beneficial owners of 10% or more of any class of our stock (“Reporting Persons”) are required from time to time to file with the SEC and the New York Stock Exchange reports of ownership and changes of ownership. Reporting Persons are required to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of forms and written representations received from Reporting Persons with respect to the fiscal year ended December 31, 2008, we believe that all filing requirements applicable to our officers, directors and greater than 10% stockholders have been met, except for a late Form 4 filing by Bruce Sauers in connection with the grant of restricted stock in December 2008, a late Form 4 filing by Zane Tankel in connection with the purchase of stock in February 2008, May 2008 and June 2008, a late Form 4 by Munawar H. Hidayatallah in connection with the vesting of performance shares in May 2008, a late Form 3 filing by Munir Akram in connection with being elected a director in September 2008, and a late Form 4 by Carlos A. Bulgheroni in connection with the grant of restricted stock in December 2008. In addition, John A. Meyers inadvertently omitted one transaction on his Form 3 for February 2008, which was reported on an amended Form 3 filed in March 2008.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics applicable to all employees and directors of the Company and each of its subsidiaries, including our principal executive officer, principal financial officer, principal accounting officer and controller, and persons performing similar functions. The purpose of the Code of Business Conduct and Ethics is: (i) to deter wrongdoing; (ii) to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (iii) to promote full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with the SEC or otherwise communicate to the public; (iv) to promote compliance with applicable governmental laws, rules and regulations; (v) to promote prompt internal reporting of violations of the code to an appropriate person; and (vi) to promote accountability for adherence to the code.

We will provide a copy of the Code of Business Conduct and Ethics without charge to any person upon request by writing our Corporate Secretary at 5075 Westheimer, Suite 890, Houston, Texas 77056. The Code of Business Conduct and Ethics is available on our website at www.alchenergy.com.

Audit Committee

The Audit Committee currently consists of four directors, Messrs. McConnaughy and Germack, who serve as Co-Chairmen, and Messrs. Hennessy and Nederlander. All of our Audit Committee members are “independent” under the applicable New York Stock Exchange, or NYSE, and SEC rules regarding audit committee membership. Our board of directors has determined that Mr. Germack qualifies as an “audit committee financial expert” under applicable SEC rules and regulations governing the composition of the Audit Committee.

The Audit Committee assists our board of directors in fulfilling its oversight responsibility by overseeing and evaluating (i) the conduct of our accounting and financial reporting process and the integrity of our financial statements; (ii) the functioning of our systems of internal accounting and financial controls; (iii) the performance and independence of our internal audit function and (iv) the engagement, compensation, performance, qualifications and independence of our independent auditors.

The independent auditors have unrestricted access and report directly to the Audit Committee. The Audit Committee meets privately with, and has unrestricted access to, the independent auditors and all of our personnel.

Our board of directors has adopted a written Audit Committee charter. A copy of the Audit Committee charter is available on our website (www.alchenergy.com) and we will provide a copy free of charge to any stockholder who requests it by writing our Corporate Secretary at 5075 Westheimer, Suite 890, Houston, Texas 77056.

ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The following section is intended to help our stockholders understand our executive compensation philosophy, objectives and policies and it is also intended to provide context for the compensation information (set forth in detail in the compensation tables and narrative discussion below) for the following persons, who are our “named executive officers” as defined by the SEC, for the fiscal year ended December 31, 2008:

•

Munawar H. Hidayatallah — Chairman and Chief Executive Officer

•

Victor M. Perez — Chief Financial Officer

•

David K. Bryan — President and Chief Executive Officer of Strata Directional Technology LLC

•

Terrence P. Keane — Senior Vice President — Oilfield Services

•

Mark C. Patterson — Senior Vice President — Rental Services

Executive Compensation Philosophy

It is critical to our long-term success and growth that our business is managed by highly capable leaders with the experience and dedication to oversee a growing and changing organization. To achieve this objective, our compensation philosophy is to recruit, retain and motivate talented and effective employees. We focus on traditional compensation principles that are geared to both our short-term and long-term performance. We adhere to the following compensation principles which influence the design and administration of our executive compensation program:

•

Compensation decisions should reflect our strategy — We have experienced rapid growth in recent years. As we have grown, we have made compensation decisions that reflect our size and growth.

•

Total compensation should reflect performance— Our compensation program provides incentives that reward executives for achieving short-term as well as long-term financial and operational goals. Our total compensation program is managed so that a significant amount of executive compensation is considered at risk, and conditioned on performance.

•

Compensation levels must be competitive— Demand for qualified executive talent in our industry is high, while the supply for this talent is limited. The level of base salaries, short-term incentive opportunities, and long-term incentive opportunities established for our named executive officers are intended to provide a total target compensation opportunity in the range of the market median for executives in comparable positions and markets in which we compete for talent.

•

Executive interests should be aligned with those of our stockholders— The value of our executive compensation programs should generally vary as our stockholders interests increase or decrease in value. Through the use of performance related annual incentives, stock option grants, and restricted stock grants, we attempt to align the long-term interests of our executives with those of our stockholders by linking a portion of executive compensation to our long-term financial performance.

•

Compensation programs should motivate executives to stay with us over the long-term— In addition to providing compensation that is competitive with the market, we attempt to provide incentive for our executives to stay with the company. We use time vested option and restricted stock awards in our compensation program, providing retention incentives for our executives to stay with us.

Compensation Program Objectives

The following chart shows each element of our compensation program, the form in which the element is delivered to the executive, its objective, and any performance metric tied to each element.

Element		Form of Compensation		Objectives
Base Pay		Fixed Cash		Recognize role, responsibilities and experience consistent with market for comparable positions
Annual Bonus		Variable Cash		Reward operating results and to provide a strong motivational tool to achieve earnings guidance and other related pre-established objectives
Long-Term Incentive		Stock Options and Restricted Stock Awards — Outcomes at vesting are variable as well as grant levels		Create strong financial incentive for achieving long-term performance and encourage a significant equity stake in our company
Health, Life, Retirement Savings and Other Benefits		Eligibility to participate in benefit plans generally available to our employees, including retirement, health, life insurance and disability plans		Plans are part of the broad-based benefits program offered to our employees
Executive Benefits and Perquisites		Auto allowance for our named executive officers and furnished apartment in Houston for our CEO		Provide competitive benefits to round out a complete compensation package

Additional discussion of each element of our compensation is provided below along with specific 2008 decisions made by the Compensation Committee regarding each element.

Pay for Performance Strategy

Each element of our compensation program described above, in both their fixed and variable nature, are intended to make up our total pay for performance strategy.

•

The fixed elements are intended to provide the foundation of compensation paid to our executives. Such elements recognize the individual’s role in the company and are reflective of experience level.

•

The variable compensation elements of the annual bonus focus on our earnings per share or earnings before interest, taxes, depreciation and amortization (EBITDA) as well as the executive’s individual responsibilities and performance outcomes.

•

Long-term compensation creates a direct link between the executive’s potential for capital accumulation and stockholder return.

Role of Compensation Committee

Executive officer compensation is administered by the Compensation Committee of our board of directors, which is composed of two non-employee directors who satisfy the independence requirements of the New York Stock Exchange. Our board of directors appoints the members of the Compensation Committee, and delegates to the Compensation Committee the responsibility for, among other matters:

•

evaluating and approving our overall compensation programs;

•

annually reviewing the performance of and setting the compensation (i.e., salary, incentive awards, and all other elements) for our chief executive officer;

•

annually reviewing the performance of and recommending the compensation for the other executive officers; and

•

reviewing and approving annual goals and mechanics along with administering our annual incentive and equity compensation plans and programs.

Compensation Governance

Each year the compensation paid to our chief executive officer is reviewed and recommended by the Compensation Committee and approved by the board of directors. The compensation awarded to our other named executive officers is proposed by the CEO, reviewed by the Compensation Committee and then recommended to the board of directors for final approval.

Our board of directors approves the compensation plans which govern our various direct compensation programs and elements. The table below outlines the governance of those programs.

						Reviewed and
		Compensation Element		Plan/Governance		Recommended By:		Approved By:
CEO		Base Salary Annual Bonus Long-Term Incentives		Employment Agreement Employment Agreement 2003 Incentive Stock Plan 2006 Incentive Plan		Compensation Committee		Board of Directors
Named Executive Officers		Base Salary Annual Bonus Long-Term Incentives		Employment Agreements Employment Agreements 2003 Incentive Stock Plan 2006 Incentive Plan		CEO & Compensation Committee		Board of Directors

Role of Compensation Consultants

Pursuant to its charter, the Compensation Committee is authorized to retain any compensation consultants or other advisors as it deems appropriate to assist in compensation matters. The Compensation Committee has the sole authority to hire and fire our compensation consultant. Since 2007, the Compensation Committee periodically engaged Cogent Compensation Partners, Inc., or Cogent, to serve as an independent compensation consultant to the Compensation Committee on executive compensation matters. Cogent performed work at the direction and under the supervision of the Compensation Committee throughout 2008. Beginning 2009, the Compensation Committee has engaged Pearl Meyer & Partners to serve as its independent advisor going forward. Pearl Meyer was retained to provide advice, research and analytical services on a variety of compensation related subjects.

Role of Our Executive Officers in Establishing Compensation

Mr. Hidayatallah, our chief executive officer, is actively involved in the compensation process and works closely with the Compensation Committee providing his assessment and recommendations on the competitiveness of our programs, any performance issues and challenges, and makes recommendations for consideration pertaining to the management team, which includes their individual compensation levels. The Committee takes these recommendations into consideration and either approves them or works with the chief executive officer to develop suitable solutions. In developing compensation recommendations, Mr. Hidayatallah has relied on his many years of experience serving as an executive officer in the oilfield service industry as well as publicly available information for comparable compensation guidance. No other executive officer assumes an active role in the evaluation, design or administration of our executive officer compensation programs. Mr. Hidayatallah participates in Committee meetings relating to the compensation of our other executive officers. Mr. Hidayatallah does not attend Compensation Committee meetings that pertain to himself. The Committee also meets in executive session, independently of the chief executive officer and other members of senior management to review not only the CEO’s compensation but those of all named executive officers and other key employees.

Benchmarking

The Compensation Committee analyzes the compensation practices of a group of our peer companies, consisting of other publicly-traded energy services companies within a range of market cap and revenue size. Additionally, the Compensation Committee considers the best practices in compensation policies from other companies and does not structure our compensation on market data alone. The Committee, historically, has used peer group information and other market data only as a general guideline for its deliberations.

Our current peer group of companies was established in 2006. The Compensation Committee did not conduct a formal review of the compensation practices or levels of our peer group in 2008. However, the Committee plans to use this type of benchmarking in the future as needed to complement its own analysis, and not as an independent source for making compensation related decisions.

Composition of the peer group is based upon a combination of the following factors: (1) companies that are competitors; (2) companies that compete for our specialized talent; (3) companies that may experience similar market cycles; (4) companies that may be tracked similarly by analysts; and (5) companies that have generally comparable market cap and/or revenue. These factors as well as the individual peer group companies are periodically reviewed and may change over time as needed. Our current peer group consists of the following companies:

•

Core Laboratories

•

Gulfmark Offshore Inc.

•

NATCO Group Inc.

•

Newpark Resources

•

Oil States Intl. Inc.

•

RPC Inc.

•

Superior Energy Services Inc.

•

Superior Well Services Inc.

•

Tesco Corp.

•

Tetra Technologies Inc.

Components of Executive Compensation

Our executive compensation program consists of the following components: base salary, annual bonus, long-term incentives, perquisites and benefits.

Base Salary

Competitive base salaries are designed to attract and retain employees by providing them with a stable source of income. In addition, base salaries for our executive officers are designed to compensate the executive for the experience, education, personal qualities and other qualifications of that individual that are essential for the specific role of such executive, while remaining competitive with the market. This market consists of both the oilfield services industry and other service-based industries. We have historically set pay at levels that reflect the qualifications of the individuals and their competing opportunities in the market. Our annual incentive compensation is expressed as a percentage of base salaries.

Base salaries are generally reviewed on an annual basis. In addition to benchmarking, as noted above, the Compensation Committee and our chief executive officer consider various factors when recommending base salaries, including:

•

the executive’s individual performance;

•

the performance of the executive’s business unit within Allis-Chalmers;

•

company-wide performance;

•

the executive’s experience and expertise;

•

the executive’s position and job responsibility;

•

the executive’s years of service with us; and

•

the competitive pay levels for similar positions.

No specific weight is assigned to any of these factors and our chief executive officer exercises subjective judgment when making salary recommendations with respect to our executive officers. The only increases in base salary to our named executive officers in 2008 were to Terry Keane and Mark Patterson. Both were promoted to Senior Vice President of their respective divisions and received salary increases in connection with such promotions. The Compensation Committee agreed to gradually increase Mr. Keane’s salary from $225,000 to $300,000 by increasing his base salary by $50,000 in February 2008 with another $25,000 increase effective January 2009. The Compensation Committee also agreed to gradually increase Mr. Patterson’s salary from $190,000 to $250,000 by increasing his salary by $35,000 in January 2008 with another $25,000 increase in May 2008. None of our other named executive officers received salary increases in 2008. Each other named executive officer received salary increases in connection with their new employment agreements entered into in 2007.

Annual Incentive Compensation

A significant portion of each executive’s total compensation is variable and dependent upon the achievement of one or more goals. Annual incentive compensation primarily consists of cash bonuses. When determining these bonuses, we rely on performance criteria such as the achievement of certain earnings per share or earnings before interest, taxes, depreciation and amortization, or EBITDA, the successful completion of specific job responsibilities or the achievement of other items integral to our success. For 2008, the primary performance criteria used for our corporate executives was meeting specified earnings guidance and successfully completing individual goals pertaining to specified job responsibilities. For our chief financial officer, these goals included managing our financial reporting function, maintaining Sarbanes-Oxley compliance, obtaining financing for acquisitions and receiving an unqualified audit opinion. For our division heads, their performance goals are generally tied to the achievement of established EBITDA goals for each such division. Our chief executive officer, in conjunction with the Compensation Committee, evaluates performance in light of the specified performance criteria for each executive and recommends to the Committee the amount of the annual incentive payment to be awarded. An annual cash bonus may be more than, less than or equal to the target cash bonus amount set for each executive.

Due to the operating challenges in the energy services industry presented by the current condition of the economy, each of our executives have signed a letter of agreement to waive any right to any bonuses set forth in their respective employment agreements for the 2009 calendar year.

Annual Incentive Bonus Payouts for 2008

As detailed in the table below, two of our named executive officers received an annual incentive bonus for 2008. David Bryan received 100% of his annual incentive bonus, which was based on Strata Directional Technology LLC meeting financial goals of EBITDA of at least $29,037,462 for the year. Terry Keane received 50% of his annual incentive bonus. Half of his target bonus was based on AirComp LLC meeting financial goals of EBITDA of at least $9,179,890 for the first half of 2008 and he met this target. The other half of Mr. Keane’s bonus was based on the Oilfield Services segment meeting financial goals of EBITDA of at least $43,627,024 for the last half of 2008, which was not met.

The following table shows the annual incentive bonus target and the actual amount of the annual incentive bonus paid for each named executive officer for 2008.

		Target				2008 Target				Actual 2008
		Payout % of				Bonus				Target
Name		Base				Award				Bonus Paid
Munawar H. Hidayatallah			100	%		$	500,000				—
Victor M. Perez			50	%		$	143,000				—
David K. Bryan			100	%		$	250,000			$	250,000
Terrence P. Keane			100	%		$	275,000			$	137,500
Mark C. Patterson			100	%		$	250,000				—

Discretionary Bonus Payouts for 2008

In the third quarter of 2008, the Compensation Committee approved discretionary bonuses to each of Messrs. Hidayatallah and Perez equal to 50% of their target bonus for meeting certain performance goals as well as meeting their earnings per share target through the third quarter. Mr. Hidayatallah received a bonus in the amount of $250,000 and Mr. Perez received a bonus in the amount of $71,500. The Compensation Committee did not award the remainder of their respective bonuses because their earnings per share target was not met for fiscal year 2008. Specifically, Messrs. Hidayatallah and Perez did not meet their financial goal of specified earnings guidance of at least $1.35 per share. In addition, the Compensation Committee approved a discretionary bonus to Mr. Patterson equal to 100% of his target bonus, or $250,000, although Mr. Patterson did not meet his performance criteria, which was the Rental Services segment meeting financial goals of EBITDA of at least $61,270,000 for the year. The Committee decided to award Mr. Patterson a discretionary bonus equal to the full amount of his target bonus because the Committee determined that Mr. Patterson substantially met his target financial goal and the Committee took into consideration factors that were outside his control, including challenges imposed by the transition to his new position in connection with his promotion to Senior Vice President of Rental Services in January 2008. The Compensation Committee also approved a discretionary bonus of $60,000 to Mr. Patterson in 2008. This discretionary bonus was intended to act as an inducement for Mr. Patterson to accept his new position, with increased responsibility, within the Company.

In December 2008, on the recommendation of the Compensation Committee, our board of directors approved a discretionary cash bonus of $1,430,000 to our chief executive officer, Mr. Hidayatallah. The intent behind awarding this discretionary bonus was to (a) promote the retention of Mr. Hidayatallah, (b) facilitate leadership and management continuity, and (c) better focus Mr. Hidayatallah on Allis-Chalmers’ long term strategic success. The Compensation Committee had previously granted Mr. Hidayatallah a performance award in the amount of 685,000 shares of restricted shares in connection with his employment agreement entered into in 2007. The shares were to vest in three annual installments upon achieving 12% growth in total stockholder return. The sudden downturn in the economy and across the energy services industry which occurred in 2008 played a significant role in making the achievability of the performance hurdles virtually impossible. Thus, the award lost its intended purpose of motivating high performance. This bonus, as previously stated, was intended to renew that objective. In connection with this bonus, Mr. Hidayatallah agreed to (x) extend the term of his employment agreement for an additional year, ending March 31, 2011, (y) forgo any additional cash bonus for 2008, and (z) forgo any salary increase in 2009. Mr. Hidayatallah’s employment agreement was also amended to require Mr. Hidayatallah to repay $1,180,000 of the bonus if Mr. Hidayatallah terminates his employment before the end of the term.

Long-Term Incentive Compensation

We award long-term incentive compensation to focus our executives on our long-term growth and stockholder return, as well as to encourage our executives to remain with us for the long-term. Prior to 2006, we primarily granted long-term incentives in the form of stock options pursuant to our Amended and Restated 2003 Stock Option Plan. We selected this form because of the favorable accounting and tax treatment and the expectation of key employees in our industry that they would receive stock options. In 2006, we reassessed our form of award and the Committee adopted the 2006 Incentive Plan, or the 2006 Plan, in order to provide us with a mix of long-term incentive vehicles to complement our stock option awards, namely restricted stock. We do not have pre-established target award amounts for long-term incentive grants. Instead, our chief executive officer recommends the number of awards to grant to each executive and the Compensation Committee considers the chief executive officer’s recommendations in making such awards.

Stock Options. Stock options are an important aspect of our long-term compensation program. Stock options are granted with an exercise price equal to the fair market value of the option on the date of grant. However, we did not grant options to any of our named executive officers in 2008.

Restricted Stock. Our use of restricted stock is intended to maintain consistency in management by encouraging our executives to stay with us for the long-term. Restricted stock awards provide some value to an employee during periods of stock market volatility, whereas stock options may have limited perceived value and may do little to retain and motivate employees when the current value of our stock is less than the option price. Further, restricted stock is a meaningful mechanism to align the interests of executives with those of our stockholders, without fostering an environment of undue risks.

In determining long-term incentive awards for the executives, the Compensation Committee relies on recommendations from our chief executive officer. Our chief executive officer considers several factors, including our performance, the individual performance of the executives, the retentive and motivational value of the proposed grant, and the share usage and associated accounting expense when determining restricted stock awards. In 2008, Mr. Perez was granted 50,000 shares of restricted stock and Mr. Keane was granted 90,000 shares of restricted stock. These grants are intended to further retain and motivate these executives. In addition, Mr. Patterson received a grant of 10,000 shares of restricted stock in connection with his promotion in January 2008. Each of these grants vest over three years with 20% vesting on each of the first and second anniversaries of the grant date and the remaining 60% vesting on the third anniversary of the grant date. No other named executive officer received any equity awards in 2008.

Perquisites

Our named executive officers received certain perquisites in 2008 which consisted of health benefits paid for by us, payment of life insurance premiums and a monthly car allowance. We provide these benefits to our named executive officers as part of a competitive compensation package. In addition, we provide Mr. Hidayatallah with access to a company car and driver because we believe that this allows him to devote optimal time to our business and increases his efficiency.

In addition to the benefits named above, we reimburse Mr. Hidayatallah for maintaining an apartment in Houston, Texas in close proximity to our corporate office because Mr. Hidayatallah resides in California. We also reimburse Mr. Hidayatallah for expenses for traveling between Texas and California. Mr. Hidayatallah’s reimbursements for his travel expenses and his apartment in Houston are provided for in his employment agreement.

We did not provide tax gross-ups related to these perquisites in 2008.

Employee Benefits

We offer our named executive officers standard employee benefits to provide for them in time of disability and to allow us to remain competitive in the market in order to attract and retain key employees. Our primary benefits, which are available to all employees, include participation in our employee health, dental and vision plans, disability and life insurance plans and our 401(k) savings plan. We currently match 5% of the employees’ pre-tax contributions up to 3% of the employee’s salary (including bonus), subject to contribution limits. We also pay the cost of health insurance premiums for each of our named executive officers.

Executive Compensation Policies and Processes

Equity Award Grant Practices

We award all stock options to purchase our common stock to executive officers and all other employees at the market price of our common stock on the grant date. Employees are not allowed to select the effective date of stock option grants and neither we nor the Compensation Committee has ever back-dated any option awards. Although the Compensation Committee does not set specific dates in which it makes equity awards, the Compensation Committee does not time its approval of equity awards around the release of any material non-public information.

Policy Regarding Section 162(m) of the Internal Revenue Code

Section 162(m) of the Internal Revenue Code generally limits our ability to take a federal income tax deduction for compensation paid to our named executive officers in excess of $1 million. The stock options we grant have been structured to qualify as performance-based so they are not subject to this deduction limitation. Although the Compensation Committee will seek to utilize deductible forms of compensation to the extent practicable, it believes it is important to preserve flexibility in administering compensation programs. Accordingly, we have not adopted a policy that all compensation must qualify as deductible under Section 162(m).

The restricted shares granted to our CEO in connection with his 2007 employment agreement were granted under the stockholder approved 2006 Incentive Plan and are deductible as performance-based compensation because they vest only upon the achievement of certain performance goals.

Executive Stock Ownership Guidelines

We do not, at this time, have any formal stock ownership and retention guidelines but recognizes the importance of retention of shares by executives as opposed to cashing them out routinely at maturity. The board and the Compensation Committee feel that retention of equity and attaining a significant investment position is important for true stockholder linkage. While we feel that our current long term incentive grants do provide a significant linkage to stockholder value we will continue to monitor and assess the need associated with instituting more formal guidelines.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K/A for the year ended December 31, 2008.

		The Compensation Committee of the Board of Directors
		Ali H. M. Afdhal Zane Tankel

Summary Compensation Table

The following table provides a summary of the cash and non-cash compensation for the year ended December 31, 2008, 2007 and 2006 for each of (1) the Chief Executive Officer and the Chief Financial Officer and (2) each of our three most highly compensated executive officers during 2008 other than the Chief Executive Officer or Chief Financial Officer. We refer to these executives collectively as the named executive officers.

																						Non-Equity
														Stock				Option				Incentive Plan				All Other
						Salary				Bonus				Awards				Awards				Compensation				Compensation				Total
Name and Principal Position		Year				($)				($)				($)(1)				($)(2)				($)(3)				($)(6)				($)
Munawar H. Hidayatallah			2008				500,000				1,680,000				4,608,455				868,914				—				148,354				7,805,723
Chairman & Chief			2007				475,000				100,000				2,013,444				547,115				—				139,034				3,274,593
Executive Officer			2006				400,000				—				—				845,694				400,000				88,240				1,733,934
Victor M. Perez			2008				286,000				71,500				230,233				54,924				—				63,334				705,991
Chief Financial Officer			2007				270,833				—				63,608				81,912				—				43,001				459,354
			2006				248,833				100,000				—				212,551				120,000				21,801				703,185
David K. Bryan			2008				250,000				—				605,809				—				250,000				44,084				1,149,893
President and Chief			2007				250,000				—				309,877				5,284				231,250				21,148				817,559
Executive Officer of			2006				187,000				—				—				33,038				174,996				12,941				407,975
Strata Directional
Technology LLC
Terrence P. Keane(4)			2008				272,385				—				518,622				—				137,500				62,269				990,776
Senior Vice President -			2007				202,404				—				287,653				38,399				156,250				40,393				725,099
Oilfield Services			2006				172,038				—				—				128,957				87,500				16,062				404,557
Mark C. Patterson(5)			2008				241,403				310,000				38,975				—				—				26,939				617,317
Senior Vice President -			2007				146,655				—				—				—				—				5,215				151,870
Rental Services LLC			2006				4,747				—				—				—				—				—				4,747

Summary of All Other Compensation

										401(k) plan								Allis-Chalmers
						Health				Matching				Car				Provided				Other Personal
						Benefits				Contributions				Allowance				Car				Benefits				Total
Name		Year				($)(1)				($)				($)				($)(2)				($)(3)				($)
Munawar H. Hidayatallah			2008				72,721				4,375				—				14,543				56,715				148,354
			2007				62,788				7,500				—				12,302				56,444				139,034
			2006				27,832				3,750				—				7,023				49,635				88,240
Victor M. Perez			2008				42,647				8,687				12,000				—				—				63,334
			2007				23,513				7,488				12,000				—				—				43,001
			2006				10,723				4,578				6,500				—				—				21,801
David K. Bryan			2008				27,714				4,370				12,000				—				—				44,084
			2007				10,801				4,347				6,000				—				—				21,148
			2006				6,941				—				6,000				—				—				12,941
Terrence P. Keane			2008				42,294				7,975				12,000				—				—				62,269
			2007				22,418				5,975				12,000				—				—				40,393
			2006				5,751				2,311				8,000				—				—				16,062
Mark C. Patterson			2008				7,944				6,995				12,000				—				—				26,939
			2007				815				4,400				—				—				—				5,215
			2006				—				—				—				—				—				—

Grant of Plan-Based Awards

The following table sets forth the grants of plan-based awards for 2008 as a dollar amount for each of the named executive officers. All equity-based awards were granted under our 2006 Incentive Plan.

All Other Stock

All Other Option

Awards:

Awards:

Exercise or

Grant Date

Number of

Number of

Base Price

Fair Value

Estimated Future Payouts Under

Estimated Future Payouts Under

Shares

Securities

of

of Stock

Non-Equity Incentive Plan Awards (1)

Equity Incentive Plan Awards

of Stock

Underlying

Option

and Option

Grant

Approval

Threshold

Target

Maximum

Threshold

Target

Maximum

or Units

Options

Awards

Awards

Name

Date

Date

$

$

$

#

#

#

#(2)

#

$/sh

$(3)

Munawar H. Hidayatallah

—

500,000

—

Victor M. Perez

—

143,000

—

7/1/2008

5/2/2008

25,000

436,000

12/10/2008

12/10/2008

25,000

122,250

David K. Bryan

—

250,000

—

Terrence P. Keane

—

275,000

—

7/1/2008

5/2/2008

45,000

784,800

12/10/2008

12/10/2008

45,000

220,050

Mark C. Patterson

—

250,000

—

1/29/2008

1/29/2008

10,000

117,300

Outstanding Equity Awards at Fiscal Year-End 2008

The following table sets forth information regarding outstanding equity awards for each of our named executive officers for 2008.

		Options Awards																				Stock Awards
																																		Equity Incentive
										Equity Incentive																				Equity Incentive				Plan Awards:
										Plan Awards:																				Plan Awards:				Market or
		Number of				Number of				Number of																				Number				Payout Value
		Securities				Securities				Securities												Number of				Market Value				of Unearned				of Unearned
		Underlying				Underlying				Underlying												Shares or				of Shares or				Shares, Units				Shares, Units
		Unexercised				Unexercised				Unexercised				Option								Units of Stock				Units of Stock				or Other Rights				or Other Rights
		Options				Options				Unearned				Exercise				Option				That Have				That Have				That Have				That Have
		#				#				Options				Price				Expiration				Not Vested				Not Vested				Not Vested				Not Vested
Name		Exercisable				Unexercisable				#				$				Date				#				$ (1)				#				$ (1)
Munawar H. Hidayatallah			200,000												3.86				2/2/2015
			83,333												10.85				12/15/2015
			40,000	(2)			160,000	(2)							21.95				8/3/2017
																															456,666	(9)			2,511,663
Victor M. Perez			25,000												4.85				10/11/2014
			45,000												10.85				12/15/2015
											15,000	(3)			21.95				8/3/2017
																															25,000	(10)			137,500
																							25,000	(4)			137,500
																							25,000	(5)			137,500
David K. Bryan															4.87				5/24/2015
																							30,000	(6)			165,000
																							75,000	(7)			412,500
Terrence P. Keane			15,000												4.87				5/24/2015
			25,000												10.85				12/15/2015
																							36,000	(6)			198,000
																							45,000	(4)			247,500
																							45,000	(5)			247,500
Mark C. Patterson																							10,000	(8)			55,000

Option Exercises and Stock Vested During Fiscal Year 2008

The following table sets forth information concerning each exercise of stock options and each vesting of stock, including restricted stock and similar instruments, during 2008 for each of our named executive officers on an aggregated basis.

		Option Awards								Stock
		Number of Shares				Value Realized				Number of Shares				Value Realized
		Acquired on Exercise				on Exercise				Vested				at Vesting
Name		(#)				($)				(#)				($)
Munawar H. Hidayatallah			—				—				228,334			$	3,970,728
Victor M. Perez			—				—				—				—
David K. Bryan			20,000			$	262,610				7,500			$	128,400
Terrence P. Keane			—				—				9,000			$	154,080
Mark C. Patterson			—				—				—				—

Director Compensation for Fiscal Year 2008

We use a combination of cash and share-based incentive compensation to attract and retain qualified candidates to serve on our board of directors. In setting director compensation, we consider the significant amount of time that directors expend in fulfilling their duties to Allis-Chalmers, as well as the level of knowledge and experience that we require of members of our board of directors. Our Compensation Committee is responsible for reviewing and recommending our compensation policy regarding fees and equity compensation paid and granted to our directors. Our board of directors approves all director compensation based on the Compensation Committee’s recommendations. Directors who are also our employees do not receive cash or equity compensation for service on the board in addition to compensation payable for their service as employees of Allis-Chalmers.

Mr. Hidayatallah, our chief executive officer, is actively involved in the compensation process of our board of directors and provides recommendations to the Compensation Committee in its evaluation and setting of director compensation. Historically, we have not engaged a compensation consultant to assist in setting director compensation.

Our current policy is to pay each of our non-management directors (currently all directors other than Mr. Hidayatallah) a retainer of $10,000 each quarter. Each non-management director serving on a committee of the board of directors will receive an additional $1,500 each quarter for service on such committee, and each non-management director serving as chairman or co-chairman of a committee of the board of directors will receive an additional $1,500 each quarter for acting as chairman or co-chairman of such committee. In addition, our “audit committee financial expert” will receive an additional $12,500 on a quarterly basis. Directors are also compensated for out-of-pocket travel expenses.

The following table sets forth information concerning the compensation of each of our directors during 2008.

		Fees Earned or				Stock				Option				All Other
		Paid in Cash				Awards(2)				Awards				Compensation				Total
Name (1)		($)				($)				($)				($)				($)
Ali H.M. Afdhal			52,000				59,378				—				—				111,378
Munir Akram(3)			10,000				1,735				—				—				11,735
Alejandro Bulgheroni			40,000				59,378				—				—				99,378
Carlos Bulgheroni			40,000				59,378				—								99,378
Victor F. Germack			102,000				59,378				—				—				161,378
James M. Hennessy			47,500				59,378				—				—				106,878
John E. McConnaughy Jr.			52,000				59,378				—				—				111,378
Robert E. Nederlander			58,000				59,378				—				—				117,378
Zane Tankel			52,000				59,378				—				—				111,378
Leonard Toboroff			180,000	(4)			59,378				—				15,547	(5)			254,925

Employment Agreements and Change-in-Control Arrangements with Management

The following is a description of the employment agreements and change-in-control arrangements that are currently in effect with respect to each named executive officer. The amount of compensation payable to each named executive officer upon termination with or without cause, termination due to death or disability, termination for good reason and various change-in-control scenarios is shown below. The amounts shown assume that such termination was effective as of December 28, 2008, and thus includes amounts earned through such time and are estimates of the amounts which would be paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of such executive’s separation from us.

Employment Agreements

Munawar H. Hidayatallah, Chairman and Chief Executive Officer, entered into a three-year employment agreement with Allis-Chalmers effective April 1, 2007. On December 31, 2008, Mr. Hidayatallah entered into an amendment to the agreement whereby he agreed to extend the term of his employment agreement for an additional year, ending March 31, 2011, in consideration of receiving a cash bonus from the company intending to (a) promote his retention, (b) facilitate leadership and management continuity and (c) better focus Mr. Hidayatallah on the company’s long term strategic success. In addition, pursuant to the amendment, if Mr. Hidayatallah terminates his employment before the end of the term, he must reimburse Allis-Chalmers for a portion of the cash bonus previously received from the company. Pursuant to his original agreement, Mr. Hidayatallah receives an annual base salary of $500,000 subject to an annual increase and is entitled to receive a bonus in an amount equal to 100% of his base salary if he meets certain strategic objectives specified in the agreement. Mr. Hidayatallah is entitled to four weeks vacation per year and is eligible to participate in all employee incentive compensation plans and to receive all of the fringe benefits provided to all employees. Pursuant to the original agreement, Mr. Hidayatallah was also permitted to assume ownership on his life insurance policy that was held by Allis-Chalmers. The agreement also provides for (a) tax gross-up payments for taxes incurred under Section 4999 of the Internal Revenue Code, (b) reimbursement of legal fees incurred in connection with the negotiation of his employment agreement and (c) reimbursements for travel and lodging related to Mr. Hidayatallah’s travel from his principal residence to our headquarters in Houston, Texas. Mr. Hidayatallah is also subject to customary non-compete and non-solicitation provisions for the term of his agreement. Information with respect to compensation upon termination with or without cause, termination due to death or disability, and various change-in-control scenarios is set forth below under “Severance and Change in Control Arrangements.”

Victor M. Perez serves as our Chief Financial Officer pursuant to the terms of a three-year employment agreement effective as of April 3, 2007. Under the terms of the employment agreement, Mr. Perez receives an annual base salary of $286,000 subject to an annual increase in the discretion of the board of directors. In addition, Mr. Perez is entitled to receive a bonus in an amount equal to up to 50% of his base salary if he meets certain strategic objectives specified in his employment agreement. Mr. Perez is also entitled to four weeks vacation per year and is eligible to participate in all employee incentive compensation plans and to receive all of the fringe benefits provided to all employees. Mr. Perez is subject to customary non-compete and non-solicitation provisions for the term of his agreement. Information with respect to compensation upon termination with or without cause, termination due to death or disability, and various change-in-control scenarios is set forth below under “Severance and Change in Control Arrangements.”

David Bryan, President and Chief Executive Officer of our subsidiary Strata Directional Technology LLC, or Strata, is employed pursuant to a three-year employment agreement effective July 1, 2007. Under the terms of the employment agreement, Mr. Bryan receives an annual base salary of $250,000 subject to an annual increase in the discretion of the board of directors. In addition, Mr. Bryan is entitled to receive a bonus based on budgeted EBITDA provided that Strata meets designated minimum earnings targets and provided further that such bonus shall not exceed 100% of Mr. Bryan’s base salary. The bonus calculation is subject to adjustment in subsequent years. Mr. Bryan is also entitled to four weeks vacation per year, a $1,000 monthly car allowance, and is eligible to participate in all employee incentive compensation plans and to receive all of the fringe benefits provided to all employees. Mr. Bryan is also subject to customary non-compete and non-solicitation provisions for the term of his agreement. Information with respect to compensation upon termination with or without cause, termination due to death or disability, and various change-in-control scenarios is set forth below under “Severance and Change in Control Arrangements.”

Terrence P. Keane was promoted to Senior Vice President—Oilfield Services in January 2008. Prior to his promotion, Mr. Keane served as President of Aircomp LLC. In connection with such promotion, we amended Mr. Keane’s previous employment agreement in April 2008. Pursuant to the amended agreement, Mr. Keane is entitled to a base salary of $275,000, subject to an annual increase in the discretion of the board of directors. For 2008, Mr. Keane was entitled to receive (1) a bonus of up to 50% of his base salary based upon AirComp LLC meeting budgeted EBITDA targets established by management for the first six months of 2008 and (2) a bonus of up to 50% based upon our Oilfield Services segment meeting budgeted EBITDA targets established by our management for the last six months of 2008. For the remaining term of his agreement, Mr. Keane is entitled to receive a bonus of up to 100% of his base salary based upon our Oilfield Services segment meeting budgeted earnings before taxes, interest and depreciation targets established by management. Mr. Keane is also entitled to six weeks vacation per year and is eligible to participate in all employee incentive compensation plans and to receive all of the fringe benefits provided to all employees. In addition, Mr. Keane is entitled to a $1,000 monthly car allowance. The employment agreement also contains customary non-compete and non-solicitation provisions. Information with respect to compensation upon termination with or without cause, termination due to death or disability, and various change-in-control scenarios is set forth below under “Severance and Change in Control Arrangements.”

Mark Patterson was promoted to Senior Vice President—Rental Services in January 2008. Prior to such appointment, Mr. Patterson served as Executive Vice President of Sales and Business Development for Allis-Chalmers Rental Services LLC. Mr. Patterson is employed pursuant to a three-year contract, and is currently entitled to a base salary of $250,000, subject to an annual increase in the discretion of the board of directors. Mr. Patterson is also entitled to receive a bonus of up to 100% of his base salary based upon the Rental Services segment meeting budgeted earnings before taxes, interest and depreciation targets established by management. Mr. Patterson is also entitled to three weeks vacation per year and is eligible to participate in all employee incentive compensation plans and to receive all of the fringe benefits provided to all employees. In addition, Mr. Patterson is entitled to a $1,000 monthly car allowance. The employment agreement also contains customary non-compete and non-solicitation provisions. Information with respect to compensation upon termination with or without cause, termination due to death or disability, and various change-in-control scenarios is set forth below under “Severance and Change in Control Arrangements

Severance and Change in Control Arrangements

The following severance and change in control arrangements apply to each of the named executive officers, who are referred to as an “executive” for purposes of this discussion.

Each executive’s employment agreement provides that if his employment is terminated by us upon his death, disability or for cause, we will pay him his earned but unpaid salary as of the date of termination, any unpaid expense reimbursements, compensation for accrued, unused vacation as of the date of termination and any further compensation that may be provided by the terms of any benefit plans in which he participates and the terms of any outstanding equity grants. Termination for “Cause” for Messrs. Hidayatallah, Perez and Patterson shall occur immediately if the executive commits (1) a criminal act involving dishonesty or moral turpitude or (2) a material breach of any of the terms and provisions of his employment agreement or fails to obey written directions by our President or Chief Executive Officer (or, in the case of Mr. Hidayatallah, our board of directors) which are not inconsistent with his employment agreement. Messrs. Bryan and Keane’s employment agreements defines “Cause” to mean:

•

the commission of any act of dishonesty, fraud, misrepresentation, misappropriation, or embezzlement involving Allis-Chalmers;

•

the unauthorized use or disclosure of any confidential information or trade secrets of Allis-Chalmers;

•

any violation of a law or regulation applicable to our business, which violation does or is reasonably like to cause material injury to Allis-Chalmers;

•

executive’s conviction of, or plea of nolo contendere or guilty to (a) a felony or (b) any other crime which involves moral turpitude;

•

executive’s continued failure, in the sole discretion of the board, to perform the principal duties, functions and responsibilities of his position (other than any such failure resulting from executive’s disability) or to follow the directives of the board after written notice from Allis-Chalmers identifying the deficiencies in performance and a reasonable cure period of not less than thirty (30) days of any breach capable of cure;

•

gross negligence or willful misconduct in the performance of executive’s duties; or

•

a material and willful breach of executive’s fiduciary duties to Allis-Chalmers.

Each executive’s employment agreement provides that if his employment is terminated by us without cause or if the executive resigns within a six month period of being constructively terminated (as defined below), we will pay him his earned but unpaid salary, unearned salary for the lesser of one year following termination of employment or the remainder of the employment agreement (except for Messrs. Bryan and Keane who will receive payments through the end of their employment agreement and Mr. Hidayatallah who will receive payments equal to three times his then current annual salary) in semi-monthly payments, any unpaid expense reimbursements, compensation for accrued, unused vacation as of the date of termination and any further compensation that may be provided by the terms of any benefit plans in which he participates and the terms of any outstanding equity grants. In general, a “constructive termination” would occur if we:

•

demote the executive to a lesser position, either in title or responsibility;,

•

decrease the executive’s salary or benefits below the highest level in effect at anytime during his employment;,

•

require the executive to relocate to a principal place of business more than 50 miles from our current principal place of business, with certain exceptions;

•

are subject to a change in control (as defined below), unless executive accepts employment with the successor; or

•

breach any other material term of the employment agreement which is not cured within 30 days after receiving notice of such breach.

A “change in control” as defined in the employment agreements includes:

•

the acquisition by any individual, entity or group, or person of ownership of more than 50% of either (1) the then outstanding shares of common stock or (2) the combined voting power of our then outstanding voting securities entitled to vote, with certain exceptions;

•

individuals who currently constitute the board of directors cease for any reason to constitute at least a majority of the board, with several exceptions;

•

a complete liquidation or dissolution of Allis-Chalmers; or

•

(a) the consummation of a reorganization, merger or consolidation or (b) the sale or other disposition of all or substantially all of our assets unless, in each case, immediately following the event

	•		Our stockholders immediately before the event own, directly or indirectly, at least 50% of the combined voting power of our then outstanding voting securities in substantially the same proportion as their ownership of us, or
	•		At least a majority of the members of the board of directors of the entity resulting from the transaction were members of the incumbent board at the time of the execution of the agreement providing for the transaction.

The following table sets forth the estimated payments and benefits that would be provided to each named executive officer, other than Mr. Hidayatallah, if such officer’s employment had been terminated on December 31, 2008 by us without cause or upon a change of control:

						Value of Unvested				Value of Unvested
						Equity Awards if				Equity Awards if								Total if
						Change of				Terminated				Total if Change				Terminated
Name		Salary Continuation				Control(1)				Without Cause				of Control				Without Cause
Victor M. Perez,		$	286,000			$	412,500	(2)			—			$	698,500			$	286,000
Chief Financial Officer
David Bryan,		$	375,000			$	577,500	(3)			—			$	952,500			$	375,000
President and Chief Executive Officer of Strata Directional Technology LLC
Terrence P. Keane,		$	412,500			$	693,000	(3)			—			$	1,105,500			$	412,500
Senior Vice President—Oilfield Services
Mark Patterson,		$	250,000			$	44,000	(3)			—			$	294,000			$	250,000
Senior Vice President—Rental Services

The following table sets for the estimated payments and benefits that would be provided to Mr. Hidayatallah if his employment had been terminated on December 31, 2008 by us due to his death or disability, with or without cause or upon a change of control:

		Salary				Value of Unvested
Event		Continuation				Equity Awards (1)				Total
Death			—			$	2,511,633			$	2,511,633
Disability			—			$	2,511,633			$	2,511,633
For Cause			—				—				—
Without Cause		$	1,500,000			$	2,511,633			$	4,011,663
Change of Control		$	1,500,000			$	2,511,633			$	4,011,663

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of our board currently consists of Messrs. Afdhal and Tankel. No current executive officer has ever served as a member of the board of directors or compensation committee of any other entity (other than our subsidiaries) that has or has had one or more executive officers serving as a member of our board or our Compensation Committee.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information as of December 31, 2008 with respect to the shares of our common stock that may be issued under our existing equity compensation plans.

Number of

Securities to be

Weighted

Issued Upon

Average Exercise

Number of Securities

Exercise of

Price of

Remaining Available

Outstanding

Outstanding

for Future Issuance

Options, Warrants

Options, Warrants

Under Equity

Plan Category

And Rights

and Rights

Compensation Plans

Equity compensation plans approved by security holders

1,379,398

$

10.94

281,789

Equity compensation plans not approved by security holders

4,000

$

13.75

—

Total

1,383,398

$

10.95

281,789

Equity Compensation Plans Not Approved By Security Holders

These plans comprise the following:

In 1999 and 2000, the board of directors compensated board members who had served from 1989 to March 31, 1999 without compensation by issuing promissory notes totaling $325,000 and by granting stock options to these same individuals. Options to purchase 4,800 shares of common stock were granted with an exercise price of $13.75. These options vested immediately and expire in March 2010. As of December 31, 2008, 4,000 of these options remain outstanding.

Securities Ownership of Management and Certain Beneficial Owners

The following table sets forth the beneficial ownership of outstanding shares of our common stock as of April 5, 2009 for:

•		each of our named executive officers;
•		each of our directors;
•		all of our directors and executive officers as a group; and
•		each other person known by us to be a beneficial owner of more than 5% of our outstanding common stock.

Beneficial ownership is determined in accordance with the rules of the SEC. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to community property laws where applicable.

The address of each director and executive officer is c/o Allis-Chalmers Energy Inc., 5075 Westheimer, Suite 890, Houston, Texas 77056.

		Shares Beneficially Owned
Name and Address		Number				Percentage(1)
Named Executive Officers:
Munawar H. Hidayatallah(2)			458,553				1.3
Victor M. Perez(3)			145,000				*
David Bryan(4)			112,500				*
Terrence P. Keane(5)			175,000				*
Mark Patterson(6)			10,000				*
Directors:
Ali H. M. Afdhal(7)			11,000				*
Munir Akram(8)			4,000				*
Alejandro P. Bulgheroni(9)			4,000,000				11.2
Victor F. Germack(10)			20,000				*
James M. Hennessy(11)			24,200				*
John E. McConnaughy, Jr.(12)			8,000				*
Robert E. Nederlander(13)			558,732				1.6
Zane Tankel(14)			76,500				*
Leonard Toboroff(15)			371,594				1.0
All directors and executive officers as a group (19 persons)			6,180,412				17.0
Other 5% Holders:
Dimensional Fund Advisors LP(16)			2,261,216				6.3
Keeley Asset Management Corp.(17)			1,953,000				5.5
Grupo Carso, S.A.B. de C.V. (18)			3,297,000				9.2

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Party Transactions

A majority of DLS’ revenues are currently received pursuant to a strategic agreement with Pan American Energy, LLC, or Pan American Energy, which is a joint venture owned 60% by British Petroleum and 40% by Bridas Corporation. Alejandro P. Bulgheroni, a member of our board of directors, and Carlos A. Bulgheroni, a former member of our board of directors and brother of Alejandro Bulgheroni, may be deemed to indirectly beneficially own all of the outstanding capital stock of Bridas Corporation and are members of the Management Committee of Pan American Energy, and, as a result, have a material interest in the transactions contemplated by the strategic agreement between DLS and Pan American Energy. During 2008, DLS received approximately $121 million in revenues from services performed for Pan American Energy.

During 2008, we provided services to Beusa Energy, Inc., in an aggregate amount of approximately $1 million. Alejandro P. Bulgheroni, one of our directors, serves as Chairman of Beusa Energy, Inc.

We purchase general oilfield supplies and materials from Ralow Services, Inc., or Ralow. Ralow is owned by Brad A. Adams and Bruce A. Adams who are brothers of Burt A. Adams, a former member of our board of directors and our former President and Chief Operating Officer. During 2008, we purchased supplies and materials from Ralow in an aggregate amount of approximately $747,000.

Related Party Transaction Approval Policy

Our board of directors have adopted a written policy relating to the approval of transactions with related persons. For purposes of this policy, a related person transaction is one in which Allis-Chalmers was, is or will be a participant and the amount involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. Pursuant to the policy, all related party transactions must be reviewed and approved by the audit committee of our board of directors.

Director Independence

Under rules adopted by the New York Stock Exchange, no member of the board of directors qualifies as independent unless the board of directors affirmatively determines that the director has no material relationship with us. The board of directors considers all relevant facts and circumstances in making a determination of independence. In its determination of independence, the board of directors reviews and considers all relationships and transactions between each director, his or her family members or any business, charity or other entity in which the director has an interest, on the one hand, and we, our affiliates or entities in which a member of our senior management has an interest, on the other. As a result of its independence reviews, the board of directors has affirmatively determined that Messrs. Afdhal, Akram, Hennessy, Germack, McConnaughy, Nederlander and Tankel are “independent” as that term is defined under the corporate governance rules of the New York Stock Exchange and applicable rules of the Securities and Exchange Commission.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Principal Accounting Fees and Services

The following table shows the aggregate fees for professional services rendered by UHY LLP during the years ended December 31, 2008 and 2007.

		Fiscal Year
Fee Category		2008				2007
Audit Fees(1)		$	1,038,459			$	1,111,415
Audit Related Fees(2)			189,621				88,435
Tax Fees			—				—
All Other Fees			—				—
		$	1,228,080			$	1,199,850

Pre-Approval Policies and Procedures

We have adopted a policy that the Audit Committee must approve in advance all audit and non-audit services provided by our independent accountants. All of the audit and audit-related services, and the fees therefor, provided by UHY LLP in 2008 and 2007 were pre-approved by the Audit Committee.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) (1) Financial Statements

None.

(2) Financial Statement Schedules

None.

(3) Exhibits

The exhibits listed on the accompanying Exhibit Index are filed as part of this annual report on Form 10-K/A or incorporated by reference.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on April 29, 2009.

		/s/ Munawar H. Hidayatallah   Munawar H. Hidayatallah
		Chief Executive Officer and Chairman

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, this report has been signed on the date indicated by the following persons on behalf of the registrant and in the capacities indicated.

Name		Title		Date
/s/ Munawar H. Hidayatallah   Munawar H. Hidayatallah		Chairman and Chief Executive Officer (Principle Executive Officer)		April 29, 2009
/s/ Victor M. Perez   Victor M. Perez		Chief Financial Officer (Principal Financial Officer)		April 29, 2009
/s/ Bruce Sauers   Bruce Sauers		Chief Accounting Officer (Principal Accounting Officer)		April 29, 2009
/s/ Ali H. M. Afdhal   Ali H. M. Afdhal		Director		April 29, 2009
Munir Akram		Director		April 29, 2009
/s/ Alejandro P. Bulgheroni   Alejandro P. Bulgheroni		Director		April 29, 2009
/s/ Victor F. Germack   Victor F. Germack		Director		April 29, 2009
James M. Hennessy		Director		April 29, 2009
/s/ John E. McConnaughy, Jr.   John E. McConnaughy, Jr.		Director		April 29, 2009
Robert E. Nederlander		Director		April 29, 2009
/s/ Zane Tankel    Zane Tankel		Director		April 29, 2009
/s/ Leonard Toboroff   Leonard Toboroff		Director		April 29, 2009

EXHIBIT INDEX

Exhibit				Description
	2.1			First Amended Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code, dated September 14, 1988, which includes the First Amended and Restated Joint Plan of Reorganization dated September 14, 1988 (incorporated by reference to Registrant’s Current Report on Form 8-K dated December 1, 1988).
	2.2			Reorganization Trust Agreement dated September 14, 1988 by and between Registrant and John T. Grigsby, Jr., Trustee (incorporated by reference to Exhibit D of the First Amended and Restated Joint Plan of Reorganization dated September 14, 1988 included in Registrant’s Current Report on Form 8-K dated December 1, 1988).
	2.3			Agreement and Plan of Merger dated as of May 9, 2001 by and among Registrant, Allis-Chalmers Acquisition Corp. and Oil Quip Rentals, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed May 15, 2001).
	2.4			Stock Purchase Agreement dated February 1, 2002 by and between Registrant and Jens H. Mortensen, Jr. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed February 21, 2002).
	2.5			Stock Purchase Agreement dated February 1, 2002 by and among Registrant, Energy Spectrum Partners LP, and Strata Directional Technology, Inc. (incorporated by reference to Exhibit 2.10 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2001).
	2.6			Stock Purchase Agreement dated August 10, 2004 by and among Allis-Chalmers Corporation and the investors named thereto (incorporated by reference to Exhibit 10.37 to the Registration Statement on Form S-1 (Registration No. 118916) filed on September 10, 2004).
	2.7			Amendment to Stock Purchase Agreement dated August 10, 2004 (incorporated by reference to Exhibit 10.38 to the Registration Statement on Form S-1 (Registration No. 118916) filed on September 10, 2004).
	2.8			Addendum to Stock Purchase Agreement dated September 24, 2004 (incorporated by reference to Exhibit 10.55 to Registrant’s Current Report on Form 8-K filed on September 30, 2004).
	2.9			Asset Purchase Agreement dated November 10, 2004 by and among AirComp LLC, a Delaware limited liability company, Diamond Air Drilling Services, Inc., a Texas corporation, and Marquis Bit Co., L.L.C., a New Mexico limited liability company, Greg Hawley and Tammy Hawley, residents of Texas and Clay Wilson and Linda Wilson, residents of New Mexico (incorporated by reference to Exhibit 10.61 to the Registrant’s the Current Report on Form 8-K filed on November 16, 2004).
	2.10			Purchase Agreement and related Agreements by and among Allis-Chalmers Corporation, Chevron USA, Inc., Dale Redman and others dated December 10, 2004 (incorporated by reference to Exhibit 10.63 to the Registrant’s Current Report on Form 8-K filed on December 16, 2004).
	2.11			Stock Purchase Agreement dated April 1, 2005, by and among Allis-Chalmers Energy Inc., Thomas Whittington, Sr., Werlyn R. Bourgeois and SAM and D, LLC. (incorporated by reference to Exhibit 10.51 to the Registrant’s Current Report on Form 8-K filed on April 5, 2005).
	2.12			Stock Purchase Agreement effective May 1, 2005, by and among Allis-Chalmers Energy Inc., Wesley J. Mahone, Mike T. Wilhite, Andrew D. Mills and Tim Williams (incorporated by reference to Exhibit 10.51 to the Registrant’s Current Report on Form 8-K filed on May 6, 2005).
	2.13			Purchase Agreement dated July 11, 2005 among Allis-Chalmers Energy Inc., Mountain Compressed Air, Inc. and M-I, L.L.C. (incorporated by reference to Exhibit 10.42 to the Registrant’s Current Report on Form 8-K filed on July 15, 2005).
	2.14			Asset Purchase Agreement dated July 11, 2005 between AirComp LLC, W.T. Enterprises, Inc. and William M. Watts (incorporated by reference to Exhibit 10.43 to the Registrant’s Current Report on Form 8-K filed on July 15, 2005).
	2.15			Asset Purchase Agreement by and between Patterson Services, Inc. and Allis-Chalmers Tubular Services, Inc. (incorporated by reference to Exhibit 10.44 to the Registrant’s Current Report on Form 8-K filed on September 8, 2005).

Exhibit				Description
	2.16			Stock Purchase Agreement dated as of December 20, 2005 between the Registrant and Joe Van Matre (incorporated by reference to Exhibit 10.33 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005).
	2.17			Stock Purchase Agreement, dated as of April 27, 2006, by and among Bridas International Holdings Ltd., Bridas Central Company Ltd., Associated Petroleum Investors Limited, and the Registrant. (incorporated by reference to Exhibit 2.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006).
	2.18			Stock Purchase Agreement, dated as of October 17, 2006, by and between Allis-Chalmers Production Services, Inc. and Randolph J. Hebert (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 19, 2006).
	2.19			Asset Purchase Agreement, dated as of October 25, 2006, by and between the Registrant and Oil & Gas Rental Services, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 26, 2006).
	2.20			Agreement and Plan of Merger by and among the Registrant, Bronco Drilling Company, Inc. and Elway Merger Sub, Inc., dated as of January 23, 2008 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed on January 24, 2008).
	2.21			First Amendment, dated as of June 1, 2008, to the Agreement and Plan of Merger by and among the Registrant, Bronco Drilling Company, Inc. and Elway Merger Sub, Inc., dated as of January 23, 2008 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed on June 2, 2008).
	2.22			Stock Purchase Agreement, dated December 19, 2008, by and between the Registrant and BrazAlta Resources Corp. (filed as Exhibit 2.22 to the Registrant’s Form 10-K filed on March 9, 2009).
	3.1			Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2001).
	3.2			Certificate of Designation, Preferences and Rights of the Series A 10% Cumulative Convertible Preferred Stock ($.01 Par Value) of Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed February 21, 2002).
	3.3			Second Amended and Restated By-laws of Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report of Form 8-K filed April 3, 2008).
	3.4			Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on June 9, 2004 (incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).
	3.5			Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on January 5, 2005 (incorporated by reference to Exhibit 3.5 to the Registrant’s Current Report on Form 8-K filed January 11, 2005).
	3.6			Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on August 16, 2005 (incorporated by reference to Exhibit 3.5 to the Registrant’s Current Report on Form 8-K filed August 17, 2005).
	4.1			Specimen Stock Certificate of Common Stock of Registrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).
	4.2			Registration Rights Agreement dated as of March 31, 1999, by and between Allis-Chalmers Corporation and the Pension Benefit Guaranty Corporation (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).
	4.3			Registration Rights Agreement dated as of January 29, 2007 by and among Allis-Chalmers Energy Inc., the Guarantors named therein and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on January 29, 2007).