ALY Allis-Chalmers Energy

Faruqi & Faruqi, LLP, a leading national securities firm headquartered in New York City, is investigating the Board of Directors of Allis-Chalmers Energy Inc. (“Allis-Chalmers” or the “Company”) (NYSE: ALY) for potential breaches of fiduciary duty in connection with their conduct related to their attempt to sell the Company to Seawell Limited. Under the terms of the transaction, Allis-Chalmers shareholders will have the right to elect to receive either $4.25 in cash or 1.15 Seawell common shares for each share they own, subject to pro-ration if more than 35% of the shares elect to receive cash, placing the total value of the transaction at approximately $890 million (including assumed debt). Shares of Allis-Chalmers’ existing preferred stock will be treated as common stock on an as converted basis. The combined company is projected by analysts to have estimated revenues of $1.3 billion and EBITDA of $195 million in 2010. The merger is conditioned, among other things, on the listing of Seawell on the Oslo Bors or the London Stock Exchange and Seawell raising no less than an additional $100 million in equity. In particular, Allis-Chalmers stock traded at $4.57 per share as recently as January 14, 2010 and at least one analyst set a price target for Allis-Chalmers stock at $7.00 per share.

Whether the Allis-Chalmers’ Board of Directors breached their fiduciary duties to Allis-Chalmers stockholders by failing to conduct an adequate and fair sales process to sell the Company prior to agreeing to this proposed transaction, whether the proposed transaction undervalues Allis-Chalmers shares and by how much this proposed transaction undervalues the Company to the detriment of Allis-Chalmers shareholders are the key focus of this investigation. Faruqi & Faruqi, LLP is a national law firm which represents investors and individuals in class action litigation. The firm is focused on providing exemplary legal services in complex litigation in the areas of securities, shareholder, antitrust and consumer litigation, through all phases of litigation. The firm has an experienced trial team which has achieved significant victories on behalf of the firm’s clients.

If you own common stock in Allis-Chalmes and wish to obtain additional information, please visit us at http://www.faruqilaw.com/allis-chalmers or contact David H. Leventhal, Esq. either via e-mail at dleventhal@faruqilaw.com or by telephone at (877) 247-4292 or (212) 983-9330.

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