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<TITLE>Filed by Bowne Pure Compliance</TITLE>
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<P style="font-size: 14pt" align="center"><B>UNITED STATES<BR>
SECURITIES AND
EXCHANGE COMMISSION<BR>
<FONT style="font-size: 12pt">Washington, D.C. 20549
</FONT></B>

<P style="font-size: 18pt" align="center"><B>FORM 8-K</B>

<P style="font-size: 12pt" align="center"><B>CURRENT REPORT<BR>
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934</B>

<P style="font-size: 10pt" align="center"><B>Date of Report (Date of earliest
event reported): December 31, 2008</B>


<P style="font-size: 24pt" align="center"><B>ALLIS-CHALMERS ENERGY
INC.<BR>
</B><FONT style="font-size: 10pt">(Exact name of registrant as
specified in its charter) </FONT>
<TABLE style="font-size: 10pt; text-align: center" cellspacing="0"
cellpadding="0" width="100%" border="0">

 <TR>
  <TD width="32%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="33%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="32%">&nbsp;</TD>
 </TR>
 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>Delaware</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>001-02199</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>39-0126090</B></TD>
 </TR>
 <TR valign="top">
  <TD>(State or other Jurisdiction of Incorporation)</TD>
  <TD>&nbsp;</TD>
  <TD>(Commission File Number)</TD>
  <TD>&nbsp;</TD>
  <TD>(IRS Employer Identification No.)</TD>
 </TR>

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cellpadding="0" width="100%" border="0">

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  <TD width="49%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="49%">&nbsp;</TD>
 </TR>
 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>5075 Westheimer<BR>
Suite
890<BR>
Houston, Texas<BR>
</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>77056</B></TD>
 </TR>
 <TR valign="top">
  <TD>(Address of Principal Executive Offices)</TD>
  <TD>&nbsp;</TD>
  <TD>(Zip Code)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="center">Registrant&#8217;s telephone number,
including area code: <B>(713) 369-0550</B>
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cellpadding="0" width="30%" border="0">

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  <TD width="100%">&nbsp;</TD>
 </TR>
 <TR>
  <TD style="border-bottom: #000000 1px solid" nowrap><B>&nbsp;</B></TD>
 </TR>
 <TR>
  <TD nowrap>(Former name or former address if changed since last report.)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="left">Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:

<P style="font-size: 10pt" align="left"><FONT face="Wingdings">o</FONT> Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR>



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</DIV>

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<P style="font-size: 10pt" align="left"><B>Item&nbsp;1.01.&nbsp;&nbsp; Entry
into a Material Definitive Agreement.</B>

<P style="font-size: 10pt; text-indent: 4%" align="left">On December&nbsp;31,
2008, Allis-Chalmers Energy Inc., a Delaware corporation (the
&#8220;Company&#8221;), entered into a Second Amendment (the &#8220;Second
Amendment&#8221;), dated December&nbsp;29, 2008, to its existing Second Amended
and Restated Credit Agreement, dated as of April&nbsp;26, 2007 (the
&#8220;Credit Agreement&#8221;), by and among the Company, as borrower, Royal
Bank of Canada, as administrative agent and collateral agent, RBC Capital
Markets, as lead arranger and sole bookrunner, and the lenders party thereto.

<P style="font-size: 10pt; text-indent: 4%" align="left">The Second Amendment,
among other things, amends the Credit Agreement to (a)&nbsp;allow certain liens
on the Company&#8217;s interest in BCH Ltd., an Alberta corporation
(&#8220;BCH&#8221;), and on the assets of BCH and its wholly-owned Brazilian
subsidiary, BCH Energy do Brasil Servicos de Petroleo Ltda. (&#8220;BCH
Brazil&#8221;), (b)&nbsp;allow the Company to make certain investments in BCH,
(c)&nbsp;permit certain existing indebtedness of BCH and BCH Brazil,
(d)&nbsp;allow the Company to be a guarantor on certain of BCH&#8217;s debt,
(e)&nbsp;increase the amount of permitted purchase money obligations of the
Company and (f)&nbsp;amend the Company&#8217;s capital expenditures limit for
2008 and 2009.

<P style="font-size: 10pt; text-indent: 3%" align="left">The foregoing
description is not complete and is qualified in its entirety by reference to
the Second Amendment, a copy of which is attached as Exhibit&nbsp;10.1 to this
Current Report on Form 8-K and incorporated by reference herein.

<P style="font-size: 10pt" align="left"><B>Item&nbsp;5.02. Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.&nbsp;</B>

<P style="font-size: 10pt; text-indent: 4%" align="left">On December&nbsp;31,
2008, upon recommendation by the Company&#8217;s Compensation Committee, the
Company&#8217;s Board of Directors approved a cash bonus in the amount of
$1,430,000 to Munawar H. Hidayatallah, the Company&#8217;s Chairman and Chief
Executive Officer. The Company intends the bonus payment to (a)&nbsp;promote
the retention of Mr.&nbsp;Hidayatallah, (b) facilitate leadership and
management continuity and (c)&nbsp;better focus Mr.&nbsp;Hidayatallah on the
Company&#8217;s long term strategic success, in each case, at a time when the
Company&#8217;s other incentive compensation programs, including Mr.
Hidayatallah&#8217;s prior performance restricted stock awards, have lost
retention and motivational value. In connection with this bonus,
Mr.&nbsp;Hidayatallah agreed to (a)&nbsp;extend the term of his employment
agreement for an additional year, ending March&nbsp;31, 2011, (b)&nbsp;forgo
any additional cash bonus awards for 2008 and (c)&nbsp;forgo any salary
increases for 2009. The amendment to Mr.&nbsp;Hidayatallah&#8217;s employment
agreement further stipulates that if Mr.&nbsp;Hidayatallah terminates his
employment before the end of the term, he must reimburse the Company for
$1,180,000 previously received from the Company. In addition,
Mr.&nbsp;Hidayatallah&#8217;s employment agreement was amended to comply with
Section&nbsp;409A of the Internal Revenue Code, as amended.

<P style="font-size: 10pt; text-indent: 4%" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">2
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<P style="font-size: 10pt" align="left"><B>Item&nbsp;9.01. Financial Statements
and Exhibits</B>

<P style="font-size: 10pt; text-indent: 4%" align="left">(d)&nbsp;Exhibits:
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" cellpadding="0" width="100%"
border="0">
<!-- Begin Table Head -->

 <TR valign="bottom">
  <TD width="8%">&nbsp;</TD>
  <TD width="5%">&nbsp;</TD>
  <TD width="87%">&nbsp;</TD>
 </TR>
 <TR style="font-size: 10pt" valign="bottom">
  <TD style="border-bottom: #000000 1px solid" nowrap align="left"><B>Exhibit
No.</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid" nowrap
align="center"><B>Description</B></TD>
 </TR>
<!-- End Table Head -->
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 <TR valign="bottom">
  <TD valign="top">
<DIV style="margin-left: 0px; text-indent: 0px">10.1 </DIV>
</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="left">Second Amendment to Second Amended and Restated
Credit Agreement, dated as of December&nbsp;29, 2008, by and among the Company,
as borrower, Royal Bank of Canada, as administrative agent, and the lenders
named thereto.</TD>
 </TR>
 <TR valign="bottom">
  <TD valign="top">
<DIV style="margin-left: 0px; text-indent: 0px">10.2 </DIV>
</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="left">Amendment to Executive Employment Agreement,
dated as of December 31, 2008, by and between the Company and Munawar H.
Hidayatallah.</TD>
 </TR>
<!-- End Table Body -->

</TABLE>
</DIV>

<P style="font-size: 10pt" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">3
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<P style="font-size: 10pt" align="center">SIGNATURES

<P style="font-size: 10pt; text-indent: 4%" align="left">Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.

<P style="font-size: 10pt; margin-left: 48%" align="left">ALLIS-CHALMERS ENERGY
INC.

<P style="font-size: 10pt" align="left">Date: January&nbsp;5, 2009

<P style="margin-top: -11pt; font-size: 10pt; margin-left: 48%"
align="left">By: <U>/s/ Theodore F. Pound
III&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><br>Name: Theodore F. Pound III<BR>
Title: General Counsel and Secretary

<P style="font-size: 10pt" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">4
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border="0">

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<P style="font-size: 10pt" align="center"><B>EXHIBIT INDEX</B>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" cellpadding="0" width="100%"
border="0">
<!-- Begin Table Head -->

 <TR valign="bottom">
  <TD width="8%">&nbsp;</TD>
  <TD width="5%">&nbsp;</TD>
  <TD width="87%">&nbsp;</TD>
 </TR>
 <TR style="font-size: 10pt" valign="bottom">
  <TD style="border-bottom: #000000 1px solid" nowrap align="left"><B>Exhibit
No.</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid" nowrap
align="center"><B>Description</B></TD>
 </TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
 <TR valign="bottom">
  <TD valign="top">
<DIV style="margin-left: 0px; text-indent: 0px">10.1 </DIV>
</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="left">Second Amendment to Second Amended and Restated
Credit Agreement, dated as of December&nbsp;29, 2008, by and among the Company,
as borrower, Royal Bank of Canada, as administrative agent, and the lenders
named thereto.</TD>
 </TR>
 <TR valign="bottom">
  <TD valign="top">
<DIV style="margin-left: 0px; text-indent: 0px">10.2 </DIV>
</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="left">Amendment to Employment Agreement, dated as of
December&nbsp;31, 2008, by and between the Company and Munawar H.
Hidayatallah.</TD>
 </TR>
<!-- End Table Body -->

</TABLE>
</DIV>

<P style="font-size: 10pt" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">5
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</HTML>
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{"company-data": {"conformed-name": "Allis Chalmers Energy Inc.", "cik": "0000003982", "assigned-sic": "1389", "irs-number": "390126090", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-02199", "film-number": "09513458"}, "business-address": {"street1": "5075 WESTHEIMER", "street2": "SUITE 890", "city": "HOUSTON", "state": "TX", "zip": "77056", "phone": "713-369-0550"}, "mail-address": {"street1": "5075 WESTHEIMER", "street2": "SUITE 890", "city": "HOUSTON", "state": "TX", "zip": "77056"}, "former-company": [{"former-conformed-name": "ALLIS CHALMERS CORP", "date-changed": "19920703"}, {"former-conformed-name": "ALLIS CHALMERS MANUFACTURING CO", "date-changed": "19710614"}]}
Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): December 31, 2008
ALLIS-CHALMERS ENERGY
INC.
(Exact name of registrant as
specified in its charter)
Delaware
001-02199
39-0126090
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
5075 Westheimer
Suite
890
Houston, Texas
77056
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number,
including area code:
(713) 369-0550
(Former name or former address if changed since last report.)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01.   Entry
into a Material Definitive Agreement.
On December 31,
2008, Allis-Chalmers Energy Inc., a Delaware corporation (the
"Company"), entered into a Second Amendment (the "Second
Amendment"), dated December 29, 2008, to its existing Second Amended
and Restated Credit Agreement, dated as of April 26, 2007 (the
"Credit Agreement"), by and among the Company, as borrower, Royal
Bank of Canada, as administrative agent and collateral agent, RBC Capital
Markets, as lead arranger and sole bookrunner, and the lenders party thereto.
The Second Amendment,
among other things, amends the Credit Agreement to (a) allow certain liens
on the Company's interest in BCH Ltd., an Alberta corporation
("BCH"), and on the assets of BCH and its wholly-owned Brazilian
subsidiary, BCH Energy do Brasil Servicos de Petroleo Ltda. ("BCH
Brazil"), (b) allow the Company to make certain investments in BCH,
(c) permit certain existing indebtedness of BCH and BCH Brazil,
(d) allow the Company to be a guarantor on certain of BCH's debt,
(e) increase the amount of permitted purchase money obligations of the
Company and (f) amend the Company's capital expenditures limit for
2008 and 2009.
The foregoing
description is not complete and is qualified in its entirety by reference to
the Second Amendment, a copy of which is attached as Exhibit 10.1 to this
Current Report on Form 8-K and incorporated by reference herein.
Item 5.02. Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On December 31,
2008, upon recommendation by the Company's Compensation Committee, the
Company's Board of Directors approved a cash bonus in the amount of
$1,430,000 to Munawar H. Hidayatallah, the Company's Chairman and Chief
Executive Officer. The Company intends the bonus payment to (a) promote
the retention of Mr. Hidayatallah, (b) facilitate leadership and
management continuity and (c) better focus Mr. Hidayatallah on the
Company's long term strategic success, in each case, at a time when the
Company's other incentive compensation programs, including Mr.
Hidayatallah's prior performance restricted stock awards, have lost
retention and motivational value. In connection with this bonus,
Mr. Hidayatallah agreed to (a) extend the term of his employment
agreement for an additional year, ending March 31, 2011, (b) forgo
any additional cash bonus awards for 2008 and (c) forgo any salary
increases for 2009. The amendment to Mr. Hidayatallah's employment
agreement further stipulates that if Mr. Hidayatallah terminates his
employment before the end of the term, he must reimburse the Company for
$1,180,000 previously received from the Company. In addition,
Mr. Hidayatallah's employment agreement was amended to comply with
Section 409A of the Internal Revenue Code, as amended.
Item 9.01. Financial Statements
and Exhibits
(d) Exhibits:
Exhibit
No.
Description
10.1
Second Amendment to Second Amended and Restated
Credit Agreement, dated as of December 29, 2008, by and among the Company,
as borrower, Royal Bank of Canada, as administrative agent, and the lenders
named thereto.
10.2
Amendment to Executive Employment Agreement,
dated as of December 31, 2008, by and between the Company and Munawar H.
Hidayatallah.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
ALLIS-CHALMERS ENERGY
INC.
Date: January 5, 2009
By:
/s/ Theodore F. Pound
III
Name: Theodore F. Pound III
Title: General Counsel and Secretary
EXHIBIT INDEX
Exhibit
No.
Description
10.1
Second Amendment to Second Amended and Restated
Credit Agreement, dated as of December 29, 2008, by and among the Company,
as borrower, Royal Bank of Canada, as administrative agent, and the lenders
named thereto.
10.2
Amendment to Employment Agreement, dated as of
December 31, 2008, by and between the Company and Munawar H.
Hidayatallah.