SUMMARY

The following summary highlights only selected information contained elsewhere in this proxy statement/prospectus and may not contain all the information that may be important to you. Accordingly, you are encouraged to read this proxy statement/prospectus carefully and in its entirety, including its annexes and the documents incorporated by reference in this proxy statement/prospectus. See the section entitled “Where You Can Find More Information.”

Parties to the Merger (see page [—])

Allis-Chalmers Energy Inc.

Allis-Chalmers Energy Inc., a corporation organized under the laws of Delaware, is a Houston, Texas-based multi-faceted oilfield service company that provides services and equipment to oil and natural gas exploration and production companies throughout the United States, including in Texas, Louisiana, Pennsylvania, Arkansas, West Virginia, Oklahoma, Colorado, and offshore in the Gulf of Mexico, and internationally, primarily in Argentina, Brazil, Bolivia and Mexico. Allis-Chalmers provides land drilling, pulling and workover rigs and related services as well as directional drilling services, casing and tubing services, underbalanced drilling services and coiled tubing and production services and provides oilfield rental equipment, including drill pipe, tubing and blow-out prevention equipment.

Allis-Chalmers common stock is listed on the New York Stock Exchange (the “NYSE”) under the trading symbol “ALY.”

Allis-Chalmers’ principal executive offices are located at 5075 Westheimer, Suite 890, Houston, Texas 77056, its telephone number is (713) 369-0550, and its website is located at www.alchenergy.com. The information provided on Allis-Chalmers’ website is not part of this proxy statement/prospectus, and it is not incorporated by reference herein.

Seawell Limited

Seawell Limited, a limited liability company organized under the laws of Bermuda, is an international platform drilling and well services company. Seawell provides drilling and well services, including innovative technologies, engineering expertise and operational excellence in a cost-efficient manner. Seawell’s core businesses are platform drilling, drilling facility engineering, modular rigs, well intervention and oilfield technologies. Seawell has offices in Stavanger, Bergen, Aberdeen, Newcastle, Houston and Esbjerg and a joint venture in Kuala Lumpur.

Seawell was established in August 2007 as a wholly owned subsidiary of Seadrill Limited, or Seadrill, as a result of the spin off of Seadrill’s well service division. As of September 30, 2010, Seadrill owned 52.26% of the outstanding Seawell common shares.

Seawell’s corporate address is Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda, its telephone number is +1 441 295 69 35, and its website is located at www.seawellcorp.com. The information provided on Seawell’s website is not part of this proxy statement/prospectus, and it is not incorporated by reference herein.

Wellco Sub Company

Wellco Sub Company (“Wellco”) is a direct, wholly owned subsidiary of Seawell, formed as a corporation under the laws of Delaware on August 9, 2010 solely for the purpose of effecting the merger. Wellco has not conducted any business operations other than activities incidental to its formation and in connection with the transactions contemplated by the Merger Agreement.

 

Wellco’s corporate address is Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda, and its telephone number is +1 441 295 69 35.

The Merger (see page [—])

Under the Merger Agreement, Allis-Chalmers will merge with and into Wellco, with Wellco surviving the merger as a wholly owned subsidiary of Seawell (subject to Seawell’s right under the Merger Agreement to require that Allis-Chalmers, not Wellco, continue as the surviving corporation, as further described in “The Merger Agreement—Terms of the Merger”).

The Agreement and Plan of Merger and the Amendment Agreement are attached as Annexes A and B to this proxy statement/prospectus, respectively, and are incorporated by reference herein. Seawell and Allis-Chalmers encourage you to read the Merger Agreement in its entirety because it is the legal document that governs the merger.

The Allis-Chalmers Special Meeting (see page [—])

 

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Place, date and time. The special meeting will be held at 10:00 a.m., local time, on [—], 2011, at the Westin Galleria Hotel, [—] Room, 5060 West Alabama Street, Houston, Texas 77056.

 

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Who can vote at the special meeting. Holders of record of shares of Allis-Chalmers common or preferred stock as of the close of business on [—], 2011, the record date for the special meeting, have the right to vote or direct their vote at the special meeting. Stockholders whose shares are held in “street name” by a broker, bank or other nominee will need to instruct such broker, bank or other nominee how to vote such shares or obtain a proxy from such broker, bank or other nominee to vote such shares at the special meeting.

 

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Procedure for voting. Holders of record of shares of Allis-Chalmers common or preferred stock may vote their shares by completing and mailing the enclosed proxy card, by voting by telephone or on the Internet as described herein or by attending the special meeting and voting in person. Stockholders whose shares are held in “street name” by a broker, bank or other nominee should follow the voting instructions provided by such broker, bank or other nominee.

 

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Matters to be considered:

 

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the merger proposal;

 

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the amendment proposal; and

 

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any proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the foregoing proposals.

Recommendation of the Allis-Chalmers Board of Directors (see page [—])

The Allis-Chalmers board of directors unanimously recommends that you vote “FOR” the approval and adoption of the Merger Agreement, “FOR” the approval of the amendment to the certificate of designations and “FOR” any proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies.

 

Allis-Chalmers’ Reasons for the Merger (see page [—])

The Allis-Chalmers board of directors considered a number of factors in making its determination that the merger is advisable and in the best interests of Allis-Chalmers and its stockholders, including the following:

 

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the ability of the Allis-Chalmers stockholders to choose the type of consideration they would receive pursuant to the merger, and secure a fixed cash price of $4.25 per share by making a cash election, thereby potentially eliminating the effect of fluctuations in the trading price of Seawell common shares;

 

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after giving due consideration to the historical volatility in the trading price of Seawell common shares, the fact that the per share merger consideration of $4.25 in cash or $4.37 worth of Seawell common shares (based on an assumed exchange ratio of 1.15x, the closing price of the Seawell common shares on August 10, 2010 and a $/NOK exchange rate of 0.1653 as of August 10, 2010) represented a premium of 83.6% over the closing price per share of Allis-Chalmers common stock on August 10, 2010 and a premium of 14.5% over the average closing price per share of Allis-Chalmers common stock during the 180-day period ended August 10, 2010;

 

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the substantial potential benefit to Allis-Chalmers in becoming part of a larger enterprise, the compatibility of Allis-Chalmers’ and Seawell’s assets, operations and expertise, and the potential tax benefits and cost savings associated with becoming part of a non-U.S. company;

 

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Allis-Chalmers’ prospects as an independent company, including the substantial risks associated with remaining independent;

 

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the opinion rendered by Allis-Chalmers’ financial advisor, RBC Capital Markets Corporation (referred to in this proxy statement/prospectus as “RBC”), dated August 12, 2010, that based on RBC’s experience as investment bankers, as of that date and subject to the various assumptions and limitations set forth in its opinion, the merger consideration to be received by the holders of Allis-Chalmers common stock in the merger was fair, from a financial point of view, to such holders (other than Lime Rock and its affiliates), as more fully described in “The Merger—Opinion of Allis-Chalmers’ Financial Advisor;”

 

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the risk that conducting an auction or other solicitation could cause Seawell to terminate its discussions with Allis-Chalmers and the loss of employees and customers;

 

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the terms of the Merger Agreement, including the parties’ representations, warranties and covenants;

 

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Allis-Chalmers’ ability to respond to and accept a superior proposal, and/or change its recommendation with respect to the merger, in certain circumstances;

 

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the absence of any termination fee payable by Allis-Chalmers;

 

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the relatively limited nature of the closing conditions included in the Merger Agreement, including the absence of any financing-related closing condition or any requirement that Seawell obtain the approval of its shareholders, and the likelihood that the merger will be approved by requisite regulatory authorities; and

 

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the fact that Allis-Chalmers’ stockholders will be entitled to appraisal rights under Delaware law.

The board also identified and considered a number of countervailing factors and risks to Allis-Chalmers and its stockholders relating to the merger and the Merger Agreement, including the following:

 

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the exposure of Allis-Chalmers stockholders who make a stock election to the risk of declines in the market price of Seawell common shares, and the historical volatility in the trading price of Seawell common shares;

 

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the relative liquidity of the trading markets provided by the NYSE and the Oslo Stock Exchange;

 

 

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the fact that Lime Rock’s agreement to vote against any alternative acquisition proposal for a period of time following the termination of the Merger Agreement would present an obstacle to the submission of an alternative proposal to acquire Allis-Chalmers;

 

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the possibility that the merger may not be completed and the potential adverse consequences to Allis-Chalmers if the merger is not completed;

 

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the limitations imposed in the Merger Agreement on the conduct of Allis-Chalmers’ business during the pre-closing period;

 

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the fact that the merger will be a taxable transaction to Allis-Chalmers stockholders in certain circumstances; and

 

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potential conflicts of interest of Allis-Chalmers’ directors and executive officers.

Merger Consideration (see page [—])

Upon completion of the merger, each share of Allis-Chalmers common stock issued and outstanding immediately prior to the effective time (except for any dissenting shares) will be converted into either (i) 1.15 Seawell common shares or (ii) $4.25 in cash, subject to proration as described below, at the election of the holder. You will not receive any fractional Seawell common shares in the merger. Instead, Seawell will pay you cash for any fractional Seawell common shares that you would otherwise receive.

If the amendment proposal is not approved and adopted, upon completion of the merger, each share of Allis-Chalmers preferred stock issued and outstanding immediately prior to the effective time will be converted into a mix of cash and Seawell common shares (equal to the weighted average of the types of consideration received by the holders of Allis-Chalmers common stock who affirmatively make an election) with respect to that number of shares of Allis-Chalmers common stock into which the preferred stock is convertible. If the amendment proposal is approved and adopted, upon completion of the merger, and at the election of the holder, each share of Allis-Chalmers preferred stock issued and outstanding immediately prior to the effective time will be converted into either (i) 1.15 Seawell common shares or (ii) $4.25 in cash, subject to proration as described below, with respect to that number of shares of Allis-Chalmers common stock into which the preferred stock is convertible. Pursuant to its voting agreement with Seawell, Lime Rock has agreed that if it votes in favor of the merger proposal and if the amendment proposal is approved and adopted, it will elect to receive Seawell common shares in exchange for all of its shares of preferred stock.

Election of Merger Consideration (see page [—])

Under the Merger Agreement, holders of Allis-Chalmers common stock may elect the type of merger consideration they prefer to receive in the merger. Holders of Allis-Chalmers common stock who elect to receive cash in the merger are subject to proration if the number of shares of Allis-Chalmers common stock electing to receive cash exceeds 35% of the total number of shares of Allis-Chalmers common stock outstanding immediately prior to the effective time of the merger (including all shares of common stock that would be issuable upon the conversion of all of the outstanding preferred stock of Allis-Chalmers into common stock immediately prior to the effective time, but reduced by any such shares in exchange for which the holder of the preferred stock is required to take cash under the current terms of the certificate of designations, in the event that the amendment proposal is not approved and adopted). In such event, all cash election shares in excess of the 35% limit will be entitled to receive 1.15 Seawell common shares in exchange for each such cash election share. As a result, if you elect to receive cash in exchange for your shares of Allis-Chalmers common stock, you will not know until after the election results are announced whether you will be entitled to receive cash in exchange for all or only a portion of your shares of Allis-Chalmers common stock.

 

Under the terms of the certificate of designations, the holder of the Allis-Chalmers preferred stock is not currently entitled to elect the type of consideration it prefers to receive in the merger and, upon the merger, the preferred stock will be converted into a mix of cash and Seawell common shares (equal to the weighted average of the types of consideration received by the holders of Allis-Chalmers common stock who affirmatively make an election) with respect to that number of shares of Allis-Chalmers common stock into which the preferred stock is convertible. If the amendment proposal is approved and adopted, the holder of the Allis-Chalmers preferred stock will be entitled to elect the type of merger consideration it prefers to receive as described above with respect to that number of shares of Allis-Chalmers common stock into which the preferred stock is convertible.

For more information about the election procedures, see “The Merger Agreement—Election Procedures” beginning on page [—].

Completion and Delivery of the Election Form (see page [—])

You should have received in a separate mailing an election form with instructions for making an election regarding the type of merger consideration you prefer to receive in the merger. You should promptly complete and deliver to the exchange agent your election form along with your stock certificates, if any (or a properly completed notice of guaranteed delivery). If your shares of Allis-Chalmers stock are uncertificated, please follow the instructions included with the election form to tender your shares to the exchange agent through a book-entry transfer. Do not send any stock certificates or the election form with your proxy card.

Election forms and any stock certificates (or a properly completed notice of guaranteed delivery) must be received by the exchange agent by the election deadline, which is 5:00 p.m., Houston time, on [—]. Once you tender your shares of Allis-Chalmers stock to the exchange agent you will not be able to transfer those shares until the merger is completed, unless you revoke your election by written notice to the exchange agent that is received prior to the election deadline.

If you fail to submit a properly completed election form or properly tender your shares of Allis-Chalmers stock prior to the election deadline, you will be deemed not to have made an election. As a holder making no election, you may be paid all cash, all Seawell shares, or part cash and part Seawell shares, depending on the elections that other Allis-Chalmers stockholders have made.

If your shares of Allis-Chalmers common stock are held in “street name” by your broker or other nominee you should follow your broker’s or other nominee’s instructions for making an election with respect to your shares of Allis-Chalmers common stock.

If you wish to exercise your appraisal rights, you must strictly follow the procedures prescribed by Delaware law, which are summarized under the section entitled “The Merger—Dissenters’ Shares and Appraisal Rights” beginning on page [—].

If the Merger Agreement is not approved and adopted by Allis-Chalmers stockholders, stock certificates will be returned by the exchange agent and uncertificated shares delivered in book-entry form to the exchange agent will be returned through book-entry transfer.

Required Approval of the Merger (see page [—])

Approval and adoption of the Merger Agreement require the affirmative vote of both (i) the holders of a majority of the outstanding shares of Allis-Chalmers’ common stock (including the preferred stock voting on an as-converted basis with the common stock as a single class, subject to the limitation described below) and (ii) the holders of a majority of the outstanding shares of the preferred stock, voting as a separate class. Because the

 

required vote of Allis-Chalmers’ stockholders is based upon the total number of shares of common stock and preferred stock outstanding, and not on the number of shares represented in person or by proxy at the special meeting or on the number of votes cast, the failure to submit a proxy or to vote in person will have the same effect as a vote AGAINST the merger proposal. Abstentions and broker non-votes will also have the same effect as a vote AGAINST the merger proposal.

For purposes of voting on each proposal together with the common stock, the voting rights in respect of the preferred stock held by Lime Rock will be limited such that the votes attributable to Lime Rock’s preferred stock will not, when aggregated with the votes attributable to the common stock held by Lime Rock and its affiliates, exceed 35% of the total voting power of the Allis-Chalmers common stockholders. As a result of this limitation, as of [—], the last practicable date prior to mailing of this proxy statement/prospectus, the preferred stock held a number of votes equivalent to [8,941,068] shares of Allis-Chalmers common stock.

Voting Agreement (see page [—])

As a condition to Seawell entering into the Merger Agreement, Lime Rock entered into a voting agreement with Seawell concurrently with the execution and delivery of the Merger Agreement pursuant to which it agreed, among other things, that until the nine-month anniversary of the termination of the Merger Agreement, it will vote or cause to be voted all of its shares of Allis-Chalmers common stock and preferred stock against (i) any other merger agreement or merger, consolidation, combination, sale or transfer of a material amount of assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by Allis-Chalmers or any of its subsidiaries or any Acquisition Proposal (as such term is defined in the Merger Agreement) or (ii) any amendment of the Allis-Chalmers certificate of incorporation or by-laws or other proposal or transaction which would in any manner delay, impede, frustrate, prevent or nullify the merger, the Merger Agreement or any of the transactions contemplated by the Merger Agreement or change in any manner the voting rights of any outstanding class of capital stock of Allis-Chalmers. The voting agreement also provides that Lime Rock may not solicit, initiate or knowingly facilitate or encourage any Acquisition Proposal or take certain other related actions in connection with any Acquisition Proposal. In addition, Lime Rock agreed that, if it votes in favor of the merger proposal, it will vote in favor of the amendment proposal and, if the amendment proposal is approved, it will elect to receive Seawell common shares in exchange for all of its shares of Allis-Chalmers common stock and preferred stock. Lime Rock further agreed to waive any appraisal rights it may have under Delaware law. Lime Rock also agreed not to transfer any of its shares of Allis-Chalmers common stock or preferred stock or to take certain other actions that would limit its ownership interest in its shares of Allis-Chalmers common stock and preferred stock. See “The Voting Agreement” beginning on page [—].

At the time of execution of the Merger Agreement, Lime Rock was the owner of (i) approximately 27.5% of the issued and outstanding common stock of Allis-Chalmers and (ii) 100% of the issued and outstanding 7.0% convertible perpetual preferred stock of Allis-Chalmers, after conversion of which Lime Rock would own approximately 39.4% of the issued and outstanding shares of common stock of Allis-Chalmers. The preferred stock confers the right to vote together with the common stock on an as-converted basis on all matters presented for a vote of the common stockholders and as a separate class with respect to certain matters, including the proposed merger. Through its ownership of Allis-Chalmers common stock and preferred stock, Lime Rock controls 35% of the voting power of the common stock, and 100% of the voting power of the Allis-Chalmers preferred stock, which gives it the ability to block a merger of Allis-Chalmers.

 

Interests of Allis-Chalmers’ Directors and Executive Officers in the Merger (see page [—])

When reading this proxy statement/prospectus, you should be aware that the executive officers and directors of Allis-Chalmers may have interests in the merger that are different from, or in addition to, the interests of other Allis-Chalmers stockholders generally. These interests may include, among other things, the following:

 

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severance payments for certain executive officers whose employment is terminated in certain circumstances after the effective time of the merger;

 

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the accelerated vesting of, and payment in the merger with respect to, certain stock options and performance awards, and the lapse of restrictions on shares of restricted stock, held by directors and executive officers;

 

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the continuation of service of certain directors;

 

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indemnification of all current and former directors and officers by Seawell with respect to acts or omissions by them in their capacities as directors and officers of Allis-Chalmers prior to the effective time of the merger; and

 

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the indirect interest of certain directors in the shares of Seawell held by Lime Rock.

Allis-Chalmers’ board of directors was aware of these interests and considered them, among other factors, in approving the Merger Agreement and declaring the advisability of the merger.

For a further discussion of the interests of Allis-Chalmers’ directors and executive officers in the merger, see “The Merger—Interests of Allis-Chalmers’ Directors and Executive Officers in the Merger” beginning on page [—].

Treatment of Allis-Chalmers Stock Options and Other Equity Awards (see page [—])

Under the Merger Agreement, at or prior to the election deadline, each holder of an outstanding option to purchase shares of Allis-Chalmers common stock, whether or not then exercisable or vested, and whether or not performance-based, may elect to receive, at the effective time of the merger, either cash or fully exercisable and vested options to purchase Seawell common shares. At the effective time of the merger, each Allis-Chalmers stock option will be converted in accordance with the election of the holder into either (i) the right to receive cash in an amount equal to the product of (A) the excess, if any, of $4.25 over the per share exercise price of such Allis-Chalmers stock option multiplied by (B) the number of shares of Allis-Chalmers common stock issuable upon exercise of such Allis-Chalmers stock option immediately prior to the effective time of the merger (whether or not exercisable or vested) or (ii) a fully vested and exercisable option to purchase a number of Seawell common shares equal to the product of (A) the number of shares of Allis-Chalmers common stock issuable upon exercise of such Allis-Chalmers stock option multiplied by (B) the exchange ratio (with any resulting number of shares that contains a fraction of a share being decreased to the next whole number of shares), at an exercise price equal to the quotient of (X) the per share exercise price of such Allis-Chalmers stock option divided by (Y) the exchange ratio (with any resulting exercise price that contains a fraction of a cent being increased to the next whole cent), such stock option to otherwise have terms and conditions equivalent to such outstanding Allis-Chalmers stock option; provided, however, that each such converted stock option will retain its original expiration date notwithstanding the termination of employment, retirement, death or disability of the holder of the converted option. Prior to the election deadline, Allis-Chalmers will provide written notice to each holder of an Allis-Chalmers stock option and instructions regarding how to make the election.

Under the Merger Agreement, immediately prior to the effective time, all restrictions on each restricted share of Allis-Chalmers common stock then outstanding will be deemed to have lapsed, and each such share of restricted stock will then be deemed to be an unrestricted share of Allis-Chalmers common stock. In addition, the

 

performance goals under each performance share award will be deemed to have been achieved as of immediately prior to the effective time of the merger, and at such time each such performance share will be deemed to be an unrestricted share of Allis-Chalmers common stock. At the effective time of the merger, the former restricted shares and performance shares will be treated the same as, and have the same rights and be subject to the same conditions as, shares of Allis-Chalmers common stock not subject to any restrictions. The holders of restricted shares or performance shares will have the ability to make the same election with respect to the type of merger consideration that they will receive pursuant to the merger as that made by any other holder of a share of Allis-Chalmers common stock.

Opinion of Allis-Chalmers’ Financial Advisor (see page [—])

On August 12, 2010, RBC rendered its oral opinion to the Allis-Chalmers board of directors, which opinion was subsequently confirmed in writing, that, based on RBC’s experience as investment bankers, as of that date and subject to the various assumptions and limitations set forth in its opinion, the merger consideration to be received by the holders of Allis-Chalmers common stock in the merger was fair, from a financial point of view, to such holders (other than Lime Rock and its affiliates). The full text of RBC’s written opinion, which sets forth material information relating to such opinion, including the assumptions made, matters considered and qualifications and limitations on the scope of review undertaken by RBC, is included as Annex E to this proxy statement/prospectus. We urge you to read RBC’s opinion carefully in its entirety. RBC’s opinion was provided for the information and assistance of the Allis-Chalmers board of directors in connection with its consideration of the merger and was not on behalf of any other entity or person. RBC’s opinion addressed solely the fairness, from a financial point of view, of the merger consideration to be received by the holders of Allis-Chalmers common stock (other than Lime Rock and its affiliates) in the merger and did not in any way address other terms or conditions of the merger or the Merger Agreement. RBC expressed no opinion and made no recommendation to any stockholder of Allis-Chalmers or Seawell or any other person as to how such stockholder or other person should vote or act with respect to any matter related to the merger, including any election that any Allis-Chalmers stockholder may make regarding the form of merger consideration to be received in the merger. For a more detailed discussion of RBC’s opinion, please see “The Merger—Opinion of Allis-Chalmers’ Financial Advisor” beginning on page [—].

Financing Related to the Merger (see page [—])

As a consequence of the merger, Seawell’s total financing requirement may be up to approximately $[—] million. Following the completion of the merger, Seawell may be required to refinance a portion of Allis-Chalmers’ debt to due change of control provisions in certain of Allis-Chalmers’ debt agreements. Seawell may be required to refinance up to approximately $510.9 million of Allis-Chalmers indebtedness due to such change of control provisions, consisting of (i) up to approximately $435.0 million to repurchase any Allis-Chalmers’ senior notes tendered at a price equal to 101% of the outstanding principal amount, plus accrued and unpaid interest, (ii) approximately $36.5 million under a revolving credit facility, (iii) approximately $4.1 million under letters of credit and (iv) approximately $35.3 million of other miscellaneous debt owed by Allis-Chalmers’ foreign subsidiaries. If Seawell were to retire the notes or determine to defease the covenants under the Allis-Chalmers indentures, the aggregate redemption premium would equal up to approximately $[—]. Seawell also intends to refinance its revolving line of credit with Fokus Bank. As of September 30, 2010, the outstanding amount under this facility was approximately NOK 1,112 million (approximately $180 million). In addition to its refinancing requirements, Seawell must also pay the cash component of the merger consideration. Seawell’s commitment for the cash component of the merger consideration is up to approximately $133 million.

 

Conditions to Completion of the Merger (see page [—])

The parties expect to complete the merger after all of the conditions to the merger in the Merger Agreement are satisfied or waived, including after Allis-Chalmers receives stockholder approval at its special meeting and after receipt of all required regulatory approvals. The parties currently expect to complete the merger promptly after receiving Allis-Chalmers stockholder approval at the special meeting. However, it is possible that factors outside of either company’s control could delay completion of the merger to a later time or prevent them from completing it at all.

The obligations of Seawell and Allis-Chalmers to complete the merger are subject to the satisfaction or waiver of the following conditions, among others:

 

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the approval and adoption by the Allis-Chalmers stockholders of the Merger Agreement;

 

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the expiration or termination of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Act Antitrust Improvements Act of 1976, as amended;

 

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a determination by the Committee on Foreign Investment in the United States, or the CFIUS, that the transactions contemplated by the Merger Agreement do not present any unresolved national security concerns;

 

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the listing of Seawell’s common stock on the Oslo Stock Exchange;

 

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the number of dissenting shares not exceeding 10.0% of the outstanding shares of Allis-Chalmers common stock; and

 

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the ratio of Allis-Chalmers’ net debt to its prior 12-month adjusted EBITDA being equal to or less than (a) 5.50, if the closing date is on or before December 31, 2010, (b) 5.00, if the closing date is on or after January 1, 2011 and on or before March 31, 2011 or (c) 4.00, if the closing date is on or after April 1, 2011.

The conditions set forth in the Merger Agreement may be waived by Seawell and Allis-Chalmers, subject to applicable law and the terms of the Merger Agreement. For a more complete discussion of the conditions to the merger, see “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page [—].

Restrictions on Solicitation of Third Party Acquisition Proposals (see page [—])

Allis-Chalmers has agreed that, subject to the limited exceptions described below, neither it nor any of its subsidiaries will, and that it and its subsidiaries will cause their respective representatives not to:

 

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directly or indirectly initiate, solicit or knowingly encourage or facilitate any inquiries regarding any other acquisition proposal; or

 

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participate in discussions or negotiations with, or provide any non-public information or access to its properties, books or records to, any third party that has made or is considering making such an acquisition proposal, or approve or recommend, propose to approve or recommend, or enter into any agreement relating to, such an acquisition proposal.

However, before receipt of the requisite approval by the Allis-Chalmers stockholders, Allis-Chalmers may engage in negotiations with a third party making an unsolicited, bona fide written acquisition proposal, provided that:

 

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the Allis-Chalmers board of directors has determined in good faith that such acquisition proposal constitutes, or is reasonably likely to lead to, a superior proposal, and that the failure to engage in such negotiations would be likely to be inconsistent with its fiduciary duties under applicable law; and

 

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Allis-Chalmers has complied with the terms of the Merger Agreement relating to acquisition proposals.

In addition, before receipt of the requisite approval by the Allis-Chalmers stockholders, the board of directors of Allis-Chalmers may withdraw its recommendation of the Merger Agreement or recommend, adopt or approve another acquisition proposal if:

 

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Allis-Chalmers receives an acquisition proposal that the board of directors of Allis-Chalmers determines in good faith constitutes a superior proposal; or

 

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the board of directors of Allis-Chalmers determines in good faith in response to certain changes or developments that a failure to change its recommendation would be likely to be inconsistent with its fiduciary duties to Allis-Chalmers stockholders;

provided in either case that Allis-Chalmers and its board of directors have complied with the terms of the Merger Agreement relating to such actions.

For a more detailed discussion of the non-solicitation provisions in the Merger Agreement, see “The Merger Agreement—No Solicitation of Alternative Transactions” beginning on page [—].

Termination of the Merger Agreement (see page [—])

Allis-Chalmers and Seawell may terminate the Merger Agreement by mutual written consent at any time prior to the effective time of the merger (whether before or after the Allis-Chalmers stockholders have approved and adopted the Merger Agreement at the special meeting). In addition, either Allis-Chalmers or Seawell may terminate the Merger Agreement upon written notice to the other if:

 

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the merger has not been consummated on or before February 28, 2011 (which date will be extended to May 31, 2011 if the merger has not been consummated by February 28, 2011 due to the non-satisfaction of the conditions as to regulatory approvals and listing of Seawell’s shares and all other conditions under the Merger Agreement have theretofore been satisfied or waived);

 

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any governmental entity has taken any action prohibiting consummation of the merger or making consummation of the merger illegal and such action has become final and non-appealable, provided that the party seeking termination under this provision will not be entitled to terminate the Merger Agreement if such party directly or indirectly initiated such action or failed to comply in all material respects with its obligations under the Merger Agreement;

 

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the Allis-Chalmers stockholders fail to adopt the Merger Agreement by the required vote at the special meeting;

 

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the other party has breached any of its representations, warranties, covenants or agreements in a way that the related condition to closing would not be satisfied, and such breach is not cured within 30 days or, by its nature, cannot be cured prior to the closing of the merger; or

 

•

there has been a material adverse effect on the other party that is not cured within 30 days or that, by its nature, cannot be cured prior to the closing of the merger.

Seawell may also terminate the Merger Agreement if, prior to obtaining the required vote of the Allis-Chalmers stockholders approving and adopting the Merger Agreement:

 

•

an adverse recommendation change has occurred or the Allis-Chalmers board or any committee thereof has resolved to make an adverse recommendation change; or

 

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the Allis-Chalmers board fails to publicly reaffirm its recommendation within three business days of receipt of Seawell’s written request at any time when an acquisition proposal has been made and not publicly rejected by Allis-Chalmers’ board.

 

There are no termination fees payable by either Allis-Chalmers or Seawell under the Merger Agreement.

Effect of Termination (see page [—])

In the event of termination, the Merger Agreement will be null and void and there will be no liability or obligation on the part of any party, other than with respect to each party’s obligations under the confidentiality agreement or a willful breach of the Merger Agreement.

Regulatory Approvals (see page [—])

Under the Hart Scott Rodino Improvements Act of 1976, or the HSR Act, the merger may not be completed until notification and report forms have been filed with the U.S. Federal Trade Commission, or the FTC, and the Antitrust Division of the U.S. Department of Justice, or the Antitrust Division, and the applicable waiting period has expired or been terminated. Allis-Chalmers and Seawell have filed their respective notification and report forms under the HSR Act with the FTC and the Antitrust Division and expect the waiting period to expire on November 5, 2010, unless otherwise terminated or extended by the antitrust agencies. Seawell and Allis-Chalmers have also submitted a notice of the merger to the CFIUS, in accordance with the regulations implementing the Exon-Florio Amendment to the Defense Production Act of 1950 and the CFIUS has determined that there are no unresolved national security concerns with respect to the transactions contemplated by the Merger Agreement. Subject to the terms and conditions of the Merger Agreement, Allis-Chalmers and Seawell have agreed to use their reasonable best efforts to obtain all regulatory clearances necessary to complete the merger. Notwithstanding that agreement, it is a condition to the closing of the merger that there be no suit or action by any governmental entity seeking to limit the ownership or operation of, or to require the disposition or holding separate of, a substantial portion of the business or assets of Allis-Chalmers and its subsidiaries, taken as a whole, as a result of the merger.

Rights of Stockholders to Seek Appraisal (see page [—])

Under Delaware law, holders of Allis-Chalmers stock who have not voted in favor of approving and adopting the Merger Agreement will have the right to seek appraisal of the fair value of their shares of stock as determined by the Delaware Court of Chancery if the merger is completed and they comply with all applicable requirements of Delaware law. This appraisal amount could be more than, the same as or less than the merger consideration. Among other requirements, any holder of Allis-Chalmers stock intending to exercise appraisal rights must submit a written demand for an appraisal to Allis-Chalmers prior to the special meeting. The failure to strictly follow the procedures specified under Delaware law will result in the loss of appraisal rights. For a summary of the requirements for asserting and perfecting appraisal rights, see “The Merger—Dissenters’ Shares and Appraisal Rights” beginning on page [—]. The provisions of Delaware law that address appraisal rights and govern the required procedures are attached as Annex F to this proxy statement/prospectus.

Litigation Relating to the Merger (see page [—])

Shortly following the announcement of the Merger Agreement, several putative stockholder class action petitions and complaints were filed against various combinations of Allis-Chalmers, members of the Allis-Chalmers board of directors, Seawell, and Wellco in the District Court of Harris County, Texas and the Court of Chancery of the State of Delaware. These lawsuits challenge the proposed merger and generally allege, among other things, that the members of the Allis-Chalmers board of directors have breached their fiduciary duties owed to the public stockholders of Allis-Chalmers by approving the proposed merger and failing to take steps to maximize the value of Allis-Chalmers to its public stockholders, that Allis-Chalmers, Seawell, and Wellco aided and abetted such breaches of fiduciary duties, and that the Merger Agreement unreasonably dissuades potential suitors from making competing offers and restricts Allis-Chalmers from considering competing offers. These lawsuits generally seek, among other things, compensatory damages, attorneys’ and experts’ fees, declaratory and injunctive relief concerning the alleged breaches of fiduciary duties, and injunctive relief prohibiting the defendants from consummating the merger.

 

Allis-Chalmers, its directors, and Seawell believe these lawsuits are without merit and intend to defend them vigorously.

Comparison of the Rights of Seawell Shareholders and Allis-Chalmers Stockholders (see page [—])

As a result of the merger, some stockholders of Allis-Chalmers will become shareholders of Seawell, and their rights will be governed by Seawell’s memorandum of association (the “Memorandum of Association”) and amended and restated bye-laws (the “Bye-Laws”), which differ in material respects from the Amended and Restated Certificate of Incorporation of Allis-Chalmers, as amended (the “certificate of incorporation”), and the Second Amended and Restated Bylaws of Allis-Chalmers (the “bylaws”). For example:

 

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only shareholders holding one-twentieth or more of the total voting rights of Seawell or 100 or more shareholders acting together will be able to propose resolutions to be moved at an annual general meeting of Seawell, whereas any Allis-Chalmers stockholder who is entitled to vote at an annual general meeting may, with sufficient notice, submit a proposal at an annual meeting of Allis-Chalmers stockholders;

 

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amendments to Seawell’s Memorandum of Association will require the approval of an ordinary resolution passed by a simple majority of the votes cast at a general meeting of Seawell shareholders, whereas amendments to Allis-Chalmers’ Certificate of Incorporation require the approval of the Allis-Chalmers board of directors and the approval of the holders of a majority of the outstanding stock of each class entitled to vote thereon;

 

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amendments to Seawell’s Bye-Laws will require the approval of the board of directors and the approval of an ordinary resolution passed by a simple majority of the votes cast at a general meeting of Seawell shareholders, whereas Allis-Chalmers’ bylaws may be amended by the holders of a majority of the Allis-Chalmers stock or by the Allis-Chalmers board of directors; and

 

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although Seawell shareholders will ordinarily be permitted to initiate lawsuits on behalf of the company in limited circumstances, Seawell shareholders will not generally be able to initiate class action lawsuits against Seawell.

You should also be aware that it may be difficult to effect service of process to begin a lawsuit in a U.S. court against directors and officers of Seawell who are not residents of the United States.

Material U.S. Federal Income Tax Consequences (see page [—])

The merger is intended to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code for U.S. federal income tax purposes. In addition, Allis-Chalmers will be requesting a ruling by the IRS that the merger will not be subject to Section 367(a)(1) of the Internal Revenue Code. Assuming that the merger is treated as a reorganization under Section 368(a) of the Internal Revenue Code and that your transfer of shares of Allis-Chalmers common stock to Seawell pursuant to the merger will not be subject to Section 367(a)(1) of the Internal Revenue Code, we expect that the material U.S. federal income tax consequences of the merger to Allis-Chalmers stockholders who do not own Allis-Chalmers preferred stock will be as follows:

 

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If you exchange all of your Allis-Chalmers common stock for cash in the merger, you generally will recognize capital gain or loss equal to the difference between the amount of cash received with respect to your Allis-Chalmers stock and your tax basis in the stock surrendered.

 

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If you exchange all of your Allis-Chalmers common stock for Seawell common shares in the merger, you will not recognize any gain or loss with respect to your Allis-Chalmers stock, except to the extent of any cash you may receive in lieu of a fractional Seawell share.

 

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If you exchange your Allis-Chalmers common stock for a combination of cash and Seawell common shares in the merger, you generally will recognize gain (but not loss) with respect to your Allis-Chalmers stock. The gain you recognize generally will equal the lesser of (1) the excess of the sum of

 

the cash and the fair market value of the Seawell shares received with respect to your Allis-Chalmers stock over your tax basis in the stock surrendered, or (2) the amount of cash received with respect to your Allis-Chalmers stock.

Please refer to “Material U.S. Federal Income Tax Consequences” beginning on page [—] for a more complete discussion of the U.S. federal income tax consequences of the merger. Determining the actual tax consequences of the merger to you may be complex and will depend on your specific situation. You should consult your tax advisor for a full understanding of the tax consequences of the merger to you.

Market Price of Allis-Chalmers Common Stock (see page [—])

Allis-Chalmers common stock is listed on the NYSE under the trading symbol “ALY.” The closing sale price of Allis-Chalmers common stock on the NYSE on August 12, 2010, the last trading day prior to the announcement of the merger, was $2.30. On [—], 2011, the last trading day before the date of this proxy statement/prospectus, the closing sale price of Allis-Chalmers common stock on the NYSE was $[—] per share.

Risk Factors (see page [—])

In evaluating the merger and Seawell, you should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors” beginning on page [—].