1434842--3/31/2009--Forbes_Energy_Services

related topics

{gas, price, oil}

{condition, economic, financial}

{cost, regulation, environmental}

{stock, price, operating}

{acquisition, growth, future}

{product, market, service}

{interest, director, officer}

{regulation, change, law}

{debt, indebtedness, cash}

{competitive, industry, competition}

{customer, product, revenue}

{loss, insurance, financial}

{operation, international, foreign}

{financial, litigation, operation}

{control, financial, internal}

{personnel, key, retain}

{provision, law, control}

{tax, income, asset}

{capital, credit, financial}

The industry in which we operate is highly volatile, and there can be no assurance that demand for our services will improve from recent depressed levels. We may be adversely affected by uncertainty in the global financial markets and worldwide economic downturn. Our business depends on domestic spending by the oil and natural gas industry, and this spending and our business may be adversely affected by industry and financial market conditions that are beyond our control. Our indebtedness could restrict our operations and make us more vulnerable to adverse economic conditions. Impairment of our long-term assets may adversely impact our financial position and results of operations. We may be unable to maintain pricing on our core services. Industry capacity may adversely affect our business. The industry in which we operate is highly competitive. We anticipate having substantial capital requirements that, if not met, may slow our operations. The indenture governing the Senior Secured Notes and the credit agreement governing the Credit Facility impose significant operating and financial restrictions on us that may prevent us from pursuing certain business opportunities and restrict our ability to operate our business. We are subject to the risk of technological obsolescence. We are highly dependent on certain of our officers and key employees. Our customer base is concentrated within the oil and natural gas production industry and loss of a significant customer could cause our revenue to decline substantially. We will continue to incur significant costs as a result of being obligated to comply with Securities Exchange Act reporting requirements, the Sarbanes-Oxley Act and Canadian reporting requirements, and our management will be required to devote substantial time to compliance matters. We face several risks relating to material weaknesses in our internal control over financial reporting. Activity in the oilfield services industry is seasonal and may affect our revenues during certain periods. We rely heavily on our suppliers and do not maintain written agreements with any such suppliers. We do not maintain written agreements with respect to some of our salt water disposal wells. We extend credit to our customers which presents a risk of non-payment. Due to the nature of our business, we may be subject to environmental liability. Increasing trucking regulations may increase our costs and negatively affect our results of operations. We are subject to extensive additional governmental regulation. Our operations are inherently risky, and insurance may not always be available in amounts sufficient to fully protect us. The market for oil and natural gas may be adversely affected by global demands to curtail use of such fuels. Our international operations could be adversely affected by war, civil disturbance, or political or economic turmoil, fluctuation in currency exchange rates and local import and export controls. We cannot predict how an exit by any of our principal equity investors could affect our operations or business. Our principal equity investors control important decisions affecting our governance and our operations, and their interests may differ from those of the other stockholders and noteholders. We are a Bermuda company and it may be difficult to enforce judgments against us. Our Bye-laws restrict shareholders from bringing legal action against our officers and directors. We have anti-takeover provisions in our Bye-laws and elsewhere that may discourage a change of control. Future legal proceedings could adversely affect us and our operations. We may not be able to fully integrate future acquisitions.

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1434842--3/31/2009--Forbes_Energy_Services_Ltd.