Basic Energy Services, Inc.

400 W. Illinois, Suite 800

Midland, Texas 79701

NOTICE OF THE 2006

ANNUAL MEETING OF STOCKHOLDERS

       The 2006 Annual Meeting of Stockholders of Basic Energy Services, Inc. will be held on Tuesday, May 9, 2006, at 10:00 a.m. local time, at the Petroleum Club of Midland, located at 501 W. Wall St., Midland, Texas 79701, for the following purposes:

      Stockholders of record at the close of business on March 30, 2006 are entitled to vote at the meeting or any adjournment. A list of such stockholders will be available for examination by a stockholder for any purpose germane to the meeting during ordinary business hours at our offices at 400 W. Illinois, Suite 800, Midland, Texas 79701 during the ten days prior to the meeting. Stockholders holding at least a majority of the outstanding shares of our common stock are required to be present or represented by proxy at the meeting to constitute a quorum.

      Please note that space limitations make it necessary to limit attendance at the meeting to stockholders, though each stockholder may be accompanied by one guest. Admission to the meeting will be on a first-come, first-served basis. Registration will begin at 9:30 a.m. and seating will begin at 9:45 a.m. Each stockholder may be asked to present valid picture identification, such as a driver’s license or passport. Stockholders holding stock in brokerage accounts must bring a copy of a brokerage statement reflecting stock ownership as of the record date. Cameras, recording devices and other electronic devices will not be permitted at the meeting.

Midland, Texas

April 10, 2006

Table of Contents

PROXY STATEMENT

FOR ANNUAL MEETING OF STOCKHOLDERS

MAY 9, 2006

GENERAL

      This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors in connection with the 2006 Annual Meeting of Stockholders of Basic Energy Services, Inc., a Delaware corporation (the “Company”), to be held at the Petroleum Club of Midland, located at 501 W. Wall St., Midland, Texas 79701, on Tuesday, May 9, 2006, at 10:00 a.m. local time. Stockholders of record at the close of business on March 30, 2006, are entitled to notice of, and to vote at, the meeting and at any postponement or adjournment.

      When a properly executed proxy is received prior to the meeting, the shares represented will be voted at the meeting in accordance with the directions noted on the proxy. A proxy may be revoked at any time before it is exercised by submitting a written revocation or a later-dated proxy to the Secretary of the Company at the mailing address provided below or by attending the meeting in person and so notifying the inspector of elections.

      Management does not intend to present any business for a vote at the meeting, other than (i) the election of directors, and (ii) the ratification of KPMG LLP as the Company’s independent auditor for fiscal year 2006. Unless stockholders specify otherwise in their proxy, their shares will be voted FOR the election of the nominees listed in this proxy statement, and FOR the ratification of the independent auditor. If other matters requiring the vote of stockholders properly come before the meeting, it is the intention of the persons named in the enclosed proxy card to vote proxies held by them in accordance with their judgment.

      The complete mailing address of the Company’s executive offices is 400 W. Illinois, Suite 800, Midland, Texas 79701. The approximate date on which this proxy statement and the accompanying proxy card are being sent or given to the stockholders of the Company is April 10, 2006.

VOTING PROCEDURES

      A majority of the outstanding shares of our common stock present or represented by proxy at the 2006 Annual Meeting constitutes a quorum for the transaction of business. ADP Investor Communication Services will tabulate all votes cast, in person or by submission of a properly executed proxy, before the closing of the polls at the meeting. The Company will appoint an inspector of elections at the meeting.

      The affirmative vote of holders of a plurality of our common stock present or represented by proxy at the meeting and entitled to vote is required for the election of each nominee. Therefore, abstentions and broker non-votes will not be taken into account in determining the outcome of the election of directors.

      For ratification of the independent auditor and any other matters presented for a vote of stockholders, the affirmative vote of holders of a majority of our common stock present or represented by proxy at the meeting and entitled to vote is required. Therefore, on any such matters, abstentions have the effect of a negative vote, and broker non-votes will not be taken into account.

      Stockholders who send in proxies but attend the meeting in person may vote directly if they prefer and withdraw their proxies or may allow their proxies to be voted with the similar proxies sent in by other stockholders.

VOTING SECURITIES

      On March 30, 2006, the record date, there were outstanding 33,787,305 shares of our common stock held of record by approximately 42 persons. Stockholders are entitled to one vote, exercisable in person or by proxy, for each share of our common stock held on the record date. Stockholders do not have cumulative voting rights.

PROPOSAL 1: ELECTION OF DIRECTORS

      Board of Directors. The Company’s Bylaws provide for the Board of Directors to serve in three classes having staggered terms of three years each. Three Class I directors will be elected at the 2006 Annual Meeting to serve for a three-year term expiring at the Annual Meeting of Stockholders in 2009. Pursuant to Delaware law, in the event of a vacancy on the Board of Directors, a majority of the remaining directors will be empowered to elect a successor, and the person so elected will hold office for the remainder of the full term of the director whose death, retirement, resignation, removal, disqualification or other cause created the vacancy and thereafter until the election of a successor director.

      Recommendation; Proxies. The Board of Directors recommends a vote FOR each of the nominees named below. The persons named in the enclosed proxy card will vote all shares over which they have discretionary authority FOR the election of the nominees named below. Although the Board of Directors of the Company does not anticipate that any of the nominees will be unable to serve, if such a situation should arise prior to the meeting, the appointed persons will use their discretionary authority pursuant to the proxy and vote in accordance with their best judgment.

      Nominees. The following table sets forth information for each nominee. Each nominee has consented to be named in this proxy statement and to serve as a director, if elected.

      Other Directors. The following table sets forth certain information for the Class II and Class III directors, whose terms will expire at the Annual Meetings of Stockholders in 2007 and 2008, respectively.

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

Board of Directors

      Meetings. During fiscal 2005, the Board of Directors held four meetings of the full Board and eight meetings of committees. The Nominating and Corporate Governance Committee held two meetings, the Compensation Committee held three meetings and the Audit Committee held three meetings during fiscal 2005. In addition, commencing with our public reporting in 2006, the Company’s independent auditors and management will meet with the Audit Committee Chairman prior to the issuance of earnings press releases, and the other members of the Audit Committee will be invited to attend these meetings. Each director attended at least 75% of the aggregate of (1) the total number of meetings of the Board of Directors (held during the period for which he has been a director) and (2) the total number of meetings of committees of the Board on which he served (during the periods that he served), except for Mr. Chiles, who attended 70% of the aggregate number of such meetings. Our non-management directors meet at regularly scheduled executive sessions presided over by our Chairman, Mr. Webster.

      Compensation. Directors who are our employees do not receive a retainer or fees for service on the board or any committees. We pay non-employee members of the board for their service as directors. Directors who are not employees receive, effective May 1, 2005, an annual fee of $30,000. In addition, the chairman of each committee receives the following annual fees: Audit Committee — $10,000; Compensation Committee — $6,000; and Nominating and Corporate Governance Committee — $6,000. Directors who are not employees currently receive a fee of $2,000 for each board meeting attended in person, and a fee of $1,000 for attendance at a board meeting held telephonically. For committee meetings, directors who are not employees currently receive a fee of $3,000 for each committee meeting attended in person, and a fee of $1,500 for attendance at a committee meeting held telephonically. In addition, each non-employee director has received, upon election to the board, a stock option to purchase 37,500 shares of our common stock at the market price on the date of grant, and the option vests ratably over three years. Directors are reimbursed for reasonable out-of-pocket expenses incurred in attending meetings of the board or committees and for other reasonable expenses related to the performance of their duties as directors.

      Independence. Our board of directors currently consists of eight members, including four members determined by our Board to be independent — Messrs. D’Agostino, Chiles, Johnson and Moore. The listing requirements of the New York Stock Exchange require that our board of directors be composed of a majority of independent directors within one year of the listing of our common stock on the NYSE. Accordingly, we intend to appoint additional independent directors to our board of directors.

      The Board has determined that Messrs. D’Agostino, Chiles, Johnson and Moore are independent as that term is defined by rules of the New York Stock Exchange and, in the case of the Audit Committee, rules of the Securities and Exchange Commission. In determining that each of these directors is independent, the Board considered that the Company and its subsidiaries in the ordinary course of business sell products and services to other companies, including those at which certain directors serve (or recently served) as executive officers or directors. In particular, Carrizo Oil & Gas, Inc., a company on which Mr. Johnson serves as President, Chief Executive Officer and a Director, uses the services of the Company, but such services represent less than 2% of Carrizo’s revenues. In each case, the transactions and contributions did not automatically disqualify the directors from being considered independent under the NYSE rules. The Board also determined that these transactions were not otherwise material to the Company or to the other company involved in the transactions and that none of our directors had a material interest in the transactions with these companies. Based upon its review, the Board of Directors has affirmatively determined that each of these directors are independent and that none of these independent directors has a material relationship with the Company.

      Shareholder Communications with the Board of Directors. Interested parties may communicate directly with the Board or a particular director by sending a letter to the attention of the Board or non-management directors, as applicable, c/o Secretary, Basic Energy Services, Inc., 400 W. Illinois, Suite 800, Midland, Texas 79701. The mailing envelope must contain a clear notation indicating that the

enclosed letter is a “Shareholder-Board Communication” or “Shareholder-Director Communication.” All such letters must identify the author as a shareholder and clearly state whether the intended recipients are all members of the Board or just certain specified individual directors. The Secretary will make copies of all such letters and circulate them to the appropriate director or directors.

Committees

      In compliance with the requirements of the Sarbanes Oxley Act of 2002, the NYSE listing standards and SEC rules and regulations, a majority of the directors on our nominating and corporate governance and compensation committees are currently independent and, within one year of listing on the NYSE, these committees will be fully independent and a majority of our board will be independent. A majority of the directors on our audit committee are currently independent and, within one year of effectiveness of the registration statement filed in connection with our initial public offering (December 8, 2006), the committee will be fully independent.

      The following table shows the committees on which each director serves:

      Audit Committee. The responsibilities of the Audit Committee, composed of Messrs. Moore (Chairman), D’Agostino and Chiles, include:

      To promote the independence of the audit, the Audit Committee consults separately and jointly with the independent auditors, the internal auditors and management. The Board of Directors has determined that Messrs. Moore and D’Agostino are “audit committee financial experts.” The Board of Directors has adopted a written charter for the Audit Committee, a copy of which is available in the “Investor Relations — Corporate Governance” section of the Company’s website (www.basicenergyservices.com).

      Nominating and Corporate Governance Committee. The responsibilities of the Nominating and Corporate Governance Committee, composed of Messrs. Johnson (Chairman), Webster and Moore include:

      The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee, a copy of which is available on the Company’s website (www.basicenergyservices.com).

      The Nominating and Corporate Governance Committee has not established any minimum qualifications for non-employee director candidates that it recommends for nomination.

      The Nominating and Corporate Governance Committee has established procedures for identifying and evaluating nominees. First, the Committee considers the Board’s needs. Candidates will first be interviewed by the Committee. If approved by the Committee, candidates will then be interviewed by all other members of the Board. The full Board, with such interested directors recusing themselves as appropriate, will approve all final nominations after considering the recommendations of the Committee. The Chairman of the Board, acting on behalf of the other members of the Board, will extend the formal invitation to an approved candidate to stand for election to the Board.

      Stockholders may nominate director candidates in accordance with the Company’s Bylaws. To summarize, such nominations must be made in writing to the Company’s Secretary at the Company’s principal executive offices. The recommendation must set forth certain information about both the nominee and the nominating stockholder(s). The foregoing is a summary, and the specific requirements and procedures of the Bylaws, including timing of proposals, control.

      The stockholder’s notice must set forth as to each nominee all information relating to the nominee that may be required under United States securities laws to be disclosed in solicitations of proxies for the election of directors, including the written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected. The stockholder’s notice must also set forth as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the nomination is made: (i) the name and address of such stockholder, as they appear on the Company’s books, and of any such beneficial owner, (ii) the class and number of shares of the Company that are owned beneficially and of record by such stockholder and any such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and

form of proxy to holders of a sufficient number of holders of the Corporation’s voting shares to elect such nominee or nominees.

      If the information supplied by the stockholder is deficient in any material aspect or if the foregoing procedures are not followed, the Board or the chairman of the meeting may determine that the stockholder’s nomination should not be brought before the meeting and that the nominee is ineligible for election as a director of the Company. The Committee will not alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder.

      Compensation Committee. The responsibilities of the Compensation Committee, composed of Messrs. Chiles (Chairman), D’Agostino and Wommack, include:

      The Board of Directors has adopted a written charter for the Compensation Committee, a copy of which is available on the Company’s website (www.basicenergyservices.com).

CORPORATE GOVERNANCE

Corporate Governance Guidelines and Code of Ethics

      The Board of Directors has adopted Corporate Governance Guidelines, which present a flexible framework within which the Board, supported by its Committees, directs the affairs of the Company. The Board of Directors has also adopted a Code of Ethics that applies to its directors and executive officers, including its Chief Executive Officer and Chief Financial Officer. The Corporate Governance Guidelines and Code of Ethics are available in the “Investor Relations — Corporate Governance” section of the Company’s website (www.basicenergyservices.com).

      If the Company amends or waives the Code of Ethics with respect to the chief executive officer, principal financial officer or principal accounting officer, it will post the amendment or waiver at this location on its website.

BENEFICIAL OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth the number of shares of common stock beneficially owned as of March 30, 2006 by (1) all persons who beneficially own more than 5% of the outstanding voting securities of the Company, to the knowledge of the Company’s management, (2) each current director (including each nominee), (3) each executive officer named in the Summary Compensation Table and (4) all current directors and executive officers as a group.

      

COMPENSATION COMMITTEE REPORT

      The Compensation Committee of the Board of Directors (the “Compensation Committee”) consists of three directors who are not employees of the Company, two of whom the Board of Directors have determined to be independent as defined by the standards of the New York Stock Exchange. The Compensation Committee annually reviews the Company’s compensation program and policies for executive officers and directors and determines the compensation of executive officers and directors.

      Compensation of Executive Officers. The Compensation Committee’s overall policy regarding compensation of the Company’s executive officers is to provide competitive salary levels and compensation incentives that (1) attract and retain individuals of outstanding ability in these key positions, (2) recognize individual performance and the performance of the Company relative to the performance of other companies of comparable size, complexity and quality, and (3) support both the short-term and long-term goals of the Company. The Compensation Committee believes this approach closely links the compensation of the Company’s executives to the accomplishment of Company goals that coincide with stockholder objectives.

      In addition, the Compensation Committee considers the anticipated tax treatment of the Company’s executive compensation program. Section 162(m) of the Internal Revenue Code of 1986, as amended, generally limits the corporate tax deduction for compensation paid to executive officers named in the Summary Compensation Table to $1 million, unless certain conditions are met.

      The executive compensation program has in the past included four elements that, taken together, constitute a flexible and balanced method of establishing total compensation for the Company’s executive officers. These elements are: (1) base salary; (2) quarterly incentive bonus plan cash awards to certain executive and non-executive officers; (3) annual cash incentive bonuses; and (4) long-term incentive awards, which in the past have included stock option grants and restricted stock grants.

      Providing Competitive Levels of Compensation. The Compensation Committee generally attempts to provide the Company’s executives, including Mr. Huseman, with a total compensation package that is competitive and reflective of the performance achieved by the Company compared to the performance achieved by the Company’s peers. The compensation is typically weighted toward long-term incentives with base compensation targeted in the range of the 25th to 50th percentile of the compensation peer group considered by the Committee. The Committee determines a competitive level of compensation for each executive based on information drawn from a variety of sources, including proxy statements of other companies and surveys conducted by compensation consultants. In 2005, the Committee engaged an executive compensation consultant to provide an independent survey for the purpose of determining future compensation for executive officers. The consultant selected a peer group of companies meeting some or all of the following criteria: (1) fall within an acceptable range of revenue; (2) experience a similar business cycle; (3) represent similar types of investment risk; and (4) operating in the same business lines and offering products and services to similar customers. The survey was completed in late 2005.

      While the targeted value of an executive’s compensation package may be competitive, its actual value may exceed or fall below market average levels depending on performance, as discussed below.

      Base Salaries. The Committee periodically reviews and establishes executive base salaries. Generally, base salaries are determined according to the following factors: the individual’s experience level, scope and complexity of the position held and annual performance of the individual. In addition, the Committee considers survey data. Based on fiscal 2005 performance, all executives employed by the Company during 2005 and expected to continue service during 2006 received salary increases for fiscal 2006, including Mr. Huseman.

      The Company provides limited perquisites to its senior executives. Perquisites may include vehicle allowances, club memberships and extended life insurance. These perquisites are provided to senior management based on individual employment agreements.

      Quarterly Incentive Bonus Plans. During 2005, the Company maintained quarterly Incentive Bonus Plans for all management and administrative personnel. The Company has three individual quarterly plans that address (1) area-level personnel, (2) division-level personnel and (3) corporate-level personnel. During 2005, the Company also maintained an annual incentive bonus plan for executive officers. Employees participating under these plans were eligible for cash bonuses.

      The purpose of the Area Level and Division Level quarterly incentive bonus plans is to tie the compensation of area-level management or division-level management directly to the financial return on assets employed by the participating managers’ operations, including factors tied to safety performance.

      During 2005, Corporate Level bonuses were tied to the Company’s net income.

      Messrs. Huseman, Carter and Krenek do not participate in any of the quarterly Incentive Bonus Plans and receive only annual bonuses.

      Annual Cash Bonuses. The purpose of annual cash bonuses under our Second Amended and Restated 2003 Incentive Plan are to provide motivation toward, and reward the accomplishment of, corporate annual objectives and to provide a competitive compensation package that will attract, reward and retain individuals of the highest quality. The cash bonus awards are paid based upon the achievement of corporate performance objectives.

      In 2005, no specific metrics were used in establishing annual bonus levels. All of the executive officers received an annual bonus for fiscal 2005. For 2006, the Company expects to adopt a formalized set of metrics — probably to include earnings per share, EBITDA as a percentage of revenue, return on capital employed, safety total recordable incident rate, revenue growth and individual performance — for determining annual bonuses for executive officers. Targeted bonus award levels for the Company’s executive officers will be established by the Compensation Committee each year. The Company’s annual performance measures for officers other than the Chief Executive Officer will be recommended by the Chief Executive Officer and approved by the Compensation Committee.

      Long-Term Incentive Program. The long-term incentive program was introduced in fiscal 2002 to focus management attention on Company performance over a period of time longer than one year in recognition of the long-term horizons for return on investments and strategic decisions in the energy services industry. The program is designed to motivate management to assist the Company in achieving a high level of long-term performance and serves to link this portion of executive compensation to long-term stockholder value. The Compensation Committee generally attempts to provide the Company’s executives, including Mr. Huseman, with a total compensation package that is competitive and reflective of the performance achieved by the Company compared to its peers, and is typically weighted toward long-term incentives. Aggregate stock or option holdings of the executive have no bearing on the size of a performance award.

      The Company’s Second Amended and Restated 2003 Incentive Plan, which was adopted by the board and has been approved by the Company’s stockholders as amended, covers stock awards issued under the Company’s original 2003 Incentive Plan and precedessor equity plan. This incentive plan permits the granting of any or all of the following types of awards: stock options; restricted stock; performance awards; phantom shares; other stock based awards; bonus shares; and cash awards. In fiscal 2005, the Committee made grants of stock options, which vest ratably over a four-year period beginning January 1, 2007.

      All non-employee directors and employees of, and any consultants to, the Company or any of its affiliates are eligible for participation under the incentive plan. The incentive plan is currently administered by the Compensation Committee. The Compensation Committee selects the participants who will receive awards, determines the type and terms of the awards to be granted and interprets and administers the incentive plan. No awards may be granted under the incentive plan after April 12, 2014.

      The options granted pursuant to the incentive plan may be either incentive options qualifying for beneficial tax treatment for the recipient as “incentive stock options” under Section 422 of the Code or non-qualified options. No person may be issued incentive stock options that first become exercisable in any

calendar year with respect to shares having an aggregate fair market value, at the date of grant, in excess of $100,000. No incentive stock option may be granted to a person if at the time such option is granted the person owns stock possessing more than 10% of the total combined voting power of all classes of the Company’s stock or any of it subsidiaries as defined in Section 424 of the Code, unless at the time incentive stock options are granted the purchase price for the option shares is at least 110% of the fair market value of the option shares on the date of grant and the incentive stock options are not exercisable after five years from the date of grant.

      The incentive plan permits the payment of qualified performance based compensation within the meaning of Section 162(m) of the Code, which generally limits the deduction that the Company may take for compensation paid in excess of $1,000,000 to certain of the Company’s “covered officers” in any one calendar year unless the compensation is “qualified performance based compensation” within the meaning of Section 162(m) of the Code. Prior stockholder approval of the 2003 Incentive Plan (assuming no further material modifications of the plan) will satisfy the stockholder approval requirements of Section 162(m) for the transition period beginning with the Company’s initial public offering in December 2005 and ending not later than the Company’s annual meeting of stockholders in 2009.

      CEO Compensation. Mr. Huseman’s 2005 salary was determined by the entire Board of Directors prior to the formation of the Compensation Committee in 2005. A separate, formal process of evaluating Mr. Huseman was conducted for purposes of determining his 2005 annual bonus, and the results of that process were considered in determining Mr. Huseman’s cash bonus compensation. Specifically, the Committee’s considerations included whether Mr. Huseman achieved his goals for fiscal 2005, the completion of the Company’s initial public offering and subsequent stock performance, the Company’s return on assets, and whether the Company’s earnings improved. The Compensation Committee also compared the Company’s financial performance for fiscal 2005 to the Company’s one- and five-year plans. The Committee did not base its considerations on any single factor or specifically assign relative weights to factors. Based on these considerations, Mr. Huseman was granted an annual bonus for 2005 performance of $275,000, which was paid during 2006.

      Compensation of Directors. The Compensation Committee is also responsible for determining the annual retainer, meeting fees, stock options and other benefits for members of the Board of Directors. The Compensation Committee’s objective with respect to director compensation is to provide compensation incentives that attract and retain individuals of outstanding ability.

      Directors who are Company employees do not receive a retainer or fees for service on the board or any committees. The Company pays non-employee members of the board for their service as directors. Directors who are not employees receive, effective May 1, 2005:

      Directors are also reimbursed for reasonable out-of-pocket expenses incurred in attending meetings of the board or committees and for other reasonable expenses related to the performance of their duties as directors.

      Other Compensation Committee Activities. During 2005, the Compensation Committee reviewed with advice of counsel the impact of the American Jobs Creation Act of 2004, which added Section 409A to the U.S. Internal Revenue Code. Changes were required and made in the Company’s Second Amended and Restated 2003 Incentive Plan, as well as other benefit arrangements applicable to officers and directors.

      This report of the Compensation Committee shall not be deemed “soliciting material,” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.

EXECUTIVE COMPENSATION MATTERS

      Performance Graph. The following is a line graph comparing cumulative, total shareholder return with a general market index (the S&P 500) from December 9, 2005 (the date of first trading) through December 31, 2005 and a group of peers in the same line of business or industry selected by the Company. The peer group is comprised of the following companies: Oil States International, Inc., Superior Energy Services, Inc., Tetra Technologies, Inc. and W-H Energy Services, Inc.

      The graph assumes investments of $100 on December 9, 2005 at the closing sale price, and the reinvestment of all dividends, if any.

      The graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

December 9, 2005 to December 31, 2005

Value of $100 Invested December 9, 2005 at December 30, 2005

Summary Compensation Table

      The following information relates to compensation paid by the Company for fiscal 2003, 2004 and 2005 to the Company’s Chief Executive Officer and each of the other four most highly compensated executive officers in fiscal 2005:

Aggregated Option Exercises in 2005 and Fiscal Year-End Option Values

      The following table sets forth information concerning options exercised during the last fiscal year and held as of December 31, 2005 by each of the named executive officers. None of the named executive officers exercised options during the year ended December 31, 2005. Amounts described in the following table under the heading “Value of Unexercised In-the-Money Options at December 31, 2005” are determined by multiplying the number of shares issued or issuable upon the exercise of the option by the difference between the closing price of our stock at December 31, 2005 and the per share option exercise price.

Option Grants in Last Fiscal Year

Employment Agreements

      Under the current employment agreement with Mr. Huseman effective March 1, 2004 through February 2007, Mr. Huseman is entitled to an annual salary of $325,000 and an annual bonus ranging from $50,000 to $325,000 based on Mr. Huseman’s performance. Under this employment agreement, Mr. Huseman is eligible from time to time to receive grants of stock options and other long-term equity incentive compensation under our Amended and Restated 2003 Incentive Plan. In addition, upon a qualified termination of employment Mr. Huseman would be entitled to three times his base salary plus

his current annual incentive target bonus for the full year in which the termination of employment occurred. Similarly, following a change of control of our company, Mr. Huseman would be entitled to a lump sum payment of two times his base salary plus his current annual incentive target bonus for the full year in which the change of control occurred.

      Mr. Huseman’s bonus in 2005 was unanimously approved by our Board of Directors, including the independent directors. In 2005 the Board of Directors approved the payment of a $275,000 bonus to Mr. Huseman, and the Board has approved a salary for Mr. Huseman effective in March 2006 of $400,000.

      We have also entered into employment agreements with Dub W. Harrison, Charles W. Swift, James J. Carter and James E. Tyner through April 2006. Mr. Harrison is entitled to an annual salary of $120,000, Messrs. Swift and Carter are each entitled to an annual salary of $130,000 and Mr. Tyner is entitled to an annual salary of $110,000. Under these agreements, if the officer’s employment is terminated for certain reasons, he would be entitled to a lump sum severance payment equal to six months’ salary, or 18 months’ salary (or 36 months’ salary in the case of Mr. Carter or 12 months’ salary in the case of Mr. Tyner) if termination is on or following a change of control of our company. The Board has approved 2006 salaries for these officers effective in March 2006 as follows: Harrison — $150,000; Swift — $160,000; Carter — $170,000; Tyner — $140,000.

      Under an employment agreement with Alan Krenek effective January 26, 2005 through January 2008, Mr. Krenek is entitled to an annual salary of $185,000 and an annual bonus, based on Mr. Krenek’s performance, ranging from $25,000 to $138,750. Mr. Krenek is also eligible to participate in our 2003 Incentive Plan. Under this employment agreement, Mr. Krenek received a one-time cash bonus of $37,500 and an initial grant of options to purchase 100,000 shares of stock. Under this agreement, if Mr. Krenek’s employment is terminated for certain reasons, he would be entitled to a lump sum severance payment equal to 12 months’ salary plus his current annual incentive target bonus for the full year in which the termination of employment occurred, such lump sum to be increased by 50% if termination is on or following a change of control of our company. The Board has approved a 2006 salary for Mr. Krenek of $240,000 effective in March 2006.

Certain Transactions

      We performed well servicing and fluid services for Southwest Royalties, Inc. in exchange for $1.3 million, $140,000 and $0 for the years ended 2003, 2004 and 2005, respectively. We believe prices charged to Southwest Royalties to be comparable to prices charged in the region. Mr. Wommack, one of our directors, served as President and Chairman of the Board of Southwest Royalties from 1983 until May 2004. Southwest Royalties Holdings, Inc., a former stockholder of Southwest Royalties, owned shares of our common stock, and transferred those shares to Fortress Holdings, LLC in April 2005. Mr. Wommack is the President and a board member of Fortress Holdings. Fortress Holdings also owns an equity interest in Anchor Resources, LLC, which is the general partner of two of our stockholders, Southwest Partners II, L.P. and Southwest Partners III, L.P. Mr. Wommack serves as President and is a board member of Anchor Resources.

      We performed well servicing and fluid services for Saber Resources, LLC in exchange for approximately $68,000 during the twelve months ended December 31, 2005. We believe prices charged to Saber Resources to be comparable to prices charged in the region. Mr. Wommack, one of our directors, is the President and Chairman of the Board of Saber Resources.

      Prior to our initial public offering, we entered into Share Tender and Repurchase Agreements with ten of our officers. Pursuant to these agreements, we repurchased, and nine of the officers sold, an aggregate of 135,326 shares of our common stock at $18.70 per share, the initial public offering price, less underwriting discounts and commissions, on the closing date of our initial public offering. These shares were repurchased to provide such officers the cash amounts necessary to pay certain tax liabilities associated with the vesting of restricted shares owned by them. The shares repurchased represented up to 39.2% of the vested shares of each officer issued as compensation. We withheld minimum tax liability

requirements from these proceeds and paid the remainder of the proceeds to the officers for their use in paying estimated tax liabilities. The four executive officers and number of shares that we repurchased from them upon the closing of our initial public offering were as follows: Kenneth V. Huseman — 101,975 shares; James J. Carter  — 10,005 shares; Dub W. Harrison — 11,184 shares; and Charles W. Swift — 4,161 shares. The remaining six officers were not executive officers.

      In addition to the repurchase of shares on the closing date of our initial public offering, under the Share Tender and Repurchase Agreements, we repurchased, and nine of the officers sold, an aggregate of 78,656 shares of our common stock on February 24, 2006 at $25.00 per share, the closing price per share of common stock on that date. These shares were repurchased to provide such officers the cash amounts necessary to pay certain tax liabilities associated with the vesting of restricted shares owned by them and represented up to 36.45% of the restricted shares owned by each officer that vest on that date. We withheld minimum tax liability requirements from these proceeds and paid the remainder of the proceeds to the officers for their use in paying estimated tax liabilities. The four executive officers and number of shares that we repurchased from them on February 24, 2006 were as follows: Kenneth V. Huseman — 41,000 shares; James J. Carter — 18,225 shares; Dub W. Harrison — 4,557 shares; and Charles W. Swift — 4,557 shares.

AUDIT RELATED MATTERS

Audit Committee Report

      The Audit Committee of the Board of Directors consists of three directors who are independent, as defined by the standards of the New York Stock Exchange and the rules of the Securities and Exchange Commission. Under the charter approved by the Board, the Audit Committee assists the Board in overseeing matters relating to the accounting and financial reporting practices of the Company, the adequacy of its internal controls and the quality and integrity of its financial statements and is responsible for selecting and retaining the independent auditors. The Company’s management is responsible for preparing the financial statements of the Company and the independent auditors are responsible for auditing those financial statements. The Audit Committee’s role under the charter is to provide oversight of management’s responsibility. The Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the independent auditors’ work. The Committee met three times during the year ended December 31, 2005.

      The independent auditors provided the Committee a written statement describing all the relationships between the auditors and the Company that might bear on the auditors’ independence consistent with Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees.” The Committee also discussed with the auditors any relationships that may impact the independence of the auditors.

      The Committee discussed and reviewed with the independent auditors all communications required to be discussed by standards of the Public Company Accounting Oversight Board, including those described in Statement of Auditing Standards No. 61, as amended, “Communication with Audit Committees.”

      The Committee reviewed the Company’s audited financial statements as of and for the year ended December 31, 2005, and discussed them with management and the independent auditors. Based on such review and discussions, the Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2005, for filing with the Securities and Exchange Commission.

      This report of the Audit Committee shall not be deemed “soliciting material,” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act.

Independent Auditor and Fees

      KPMG LLP, a registered public accounting firm, audited the Company’s consolidated financial statements for fiscal 2005, and has advised the Company that it will have a representative available at the 2006 Annual Meeting to respond to appropriate questions. Such representative will be permitted to make a statement if he or she so desires.

      KPMG LLP has billed the Company and its subsidiaries fees as set forth in the table below for (i) the audits of the Company’s 2004 and 2005 annual financial statements, reviews of quarterly financial statements, and review of the Company’s initial public offering on Form S-1 and other documents filed with the Securities and Exchange Commission, (ii) assurance and other services reasonably related to the audit or review of the Company’s financial statements, and (iii) services related to tax compliance.

Audit Committee Pre-Approved Policies and Procedures

      The Audit Committee of the Board of Directors has adopted policies regarding the pre-approval of auditor services. Specifically, commencing in 2006, the Audit Committee will approve at its May meeting all services provided by the independent public accountants. All additional services must be pre-approved on a case-by-case basis. The Audit Committee reviews the actual and budgeted fees for the independent public accountants at its 1st and 4th meetings. All of the services provided by KPMG LLP during fiscal 2005 were approved by the Audit Committee.

PROPOSAL 2: RATIFICATION OF INDEPENDENT AUDITOR

      The Audit Committee has selected KPMG LLP as the Company’s independent auditor for fiscal year 2006, and the Board of Directors is asking stockholders to ratify that selection. Although current law, rules, and regulations, as well as the charter of the Audit Committee, require the Company’s independent auditor to be engaged, retained and supervised by the Audit Committee, the Board is submitting the selection of KPMG LLP for ratification by stockholders as a matter of good corporate practice.

      The affirmative vote of holders of a majority of the shares of common stock present or represented by proxy at the meeting and entitled to vote is required to approve the ratification of the selection of KPMG as the Company’s independent auditor for the current fiscal year. The Board of Directors unanimously recommends that you vote FOR this proposal.

OTHER MATTERS

      Management knows of no other business that will be presented to the meeting for a vote. If other matters properly come before the meeting, the persons named as proxies will vote on them in accordance with their best judgment.

      The Company is soliciting proxies for the 2006 Annual Meeting and will bear the cost of solicitation. In addition to solicitation by mail, certain of the directors, officers or regular employees of the Company may, without extra compensation, solicit the return of proxies by telephone or electronic media. Arrangements will be made with brokerage houses, custodians and other fiduciaries to send proxy material to their principals, and the Company will reimburse these parties for any out-of-pocket expenses.

PROPOSALS OF STOCKHOLDERS FOR 2007 ANNUAL MEETING

      Stockholders of record who intend to submit a proposal at the annual meeting of stockholders in 2007 must provide written notice to the Company in accordance with the Company’s Bylaws. Under the Company’s Bylaws, such notice must be received at the Company’s principal executive offices, addressed to the Secretary of the Company, no later than December 16, 2006.

      Stockholders who intend to submit a proposal at the annual meeting of stockholders in 2007 and desire that such proposal be included in the proxy materials for such meeting must follow the procedures prescribed in the Company’s Bylaws and Rule l4a-8 under the Securities Exchange Act of 1934, as amended. To be eligible for inclusion in the proxy materials, stockholder proposals must be received by the Secretary of the Company at the Company’s principal executive offices no later than December 16, 2006.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Based solely upon a review of reports on Forms 3 and 4 and amendments thereto furnished to the Company during fiscal 2005, reports on Form 5 and amendments thereto furnished to the Company with respect to fiscal 2005, and written representations from officers and directors that no Form 5 was required to be filed, the Company believes that all filing requirements applicable to its officers, directors and beneficial owners of more than 10% of the Common Stock under Section 16(a) of the Securities Exchange Act of 1934, as amended, were complied with during fiscal 2005, except that James S. D’Agostino, Jr. was late in filing a Form 4 that reported one transaction.

ADDITIONAL INFORMATION

      We are required to provide an Annual Report to stockholders of the Company for the year ended December 31, 2005, including audited financial statements, to stockholders who receive this proxy statement. We will also provide copies of the Annual Report to brokers, dealers, banks, voting trustee and their nominees for the benefit of their beneficial owners of record. Additional copies of the Annual Report along with copies of our Annual Report on Form 10-K for the year ended December 31, 2005 (without exhibits), are available free of charge to stockholders who forward a written request to Secretary, Basic Energy Services, Inc., 400 W. Illinois, Suite 800, Midland, Texas 79701. You may also review the Company’s filings with the Securities and Exchange Commission by visiting our website at www.basicenergyservices.com.

      The Securities and Exchange Commission has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one, please notify your broker.

      The Corporate Governance Guidelines, the Code of Ethics and the charters of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee are also available on the Company’s website (www.basicenergyservices.com), and copies of these documents are available to stockholders, without charge, upon request.

Annex A

Basic Energy Services, Inc.

Audit Committee Charter

Article I.

Purpose

      The Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Basic Energy Services, Inc. (the “Company”) has been appointed by the Board for the purpose of overseeing:

      The Committee is also charged with making regular reports to the Board. Subsequent to any initial public offering of the Company’s shares of common stock (an “IPO”), the Committee shall be further charged with preparing any reports that may from time to time be required by the rules of the New York Stock Exchange (“NYSE”) or the Securities and Exchange Commission (the “SEC”) to be included in the Company’s annual proxy statement or annual report on Form 10-K.

Article II.

Membership

      The Committee shall consist of no fewer than three members of the Board. Subsequent to an IPO, prior to their election and annually thereafter, the members of the Committee shall each have been affirmatively determined by the Board (i) not to be an officer or employee of the Company, (ii) to have no relationship that would interfere with their exercise of independent judgment in carrying out the responsibilities of a director and (iii) to be “independent” under (x) the rules of the NYSE and (y) the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC thereunder (collectively, the “Exchange Act”); provided, with respect to the foregoing independence requirements, the Board may rely on applicable exemptions under Rule 10A-3(b) of the Exchange Act.

      In addition:

      Each member of the Committee shall first be nominated by the Nominating and Corporate Governance Committee of the Board and then be elected by the full Board, and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation, retirement or removal. The members of the Committee may be removed at any time, with or without cause, by majority vote of the Board.

      The Board shall elect a Chairperson of the Committee. The Chairperson of the Committee will chair all regular and special sessions of the Committee, be responsible for scheduling regular and special meetings and set the agendas for Committee meetings. This Chairperson shall serve until his or her successor is duly elected and qualified or until his or her earlier resignation, retirement or removal. If the Chairperson is absent from a particular meeting, another member of the Committee shall serve as chairperson for purposes of that meeting.

      The Committee may delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.

Article III.

Meetings

      The Committee shall meet at least four times per year. Additional meetings may occur as the Committee or its Chairperson deem advisable. As part of the Committee’s oversight function, the Committee shall meet with the Company’s independent auditor and management at least quarterly to review the Company’s financial statements. The Committee (1) may meet separately in executive session with (a) the Company’s independent auditors, (b) members of management, (c) non-management members of the Board who are not members of the Committee or (d) any other persons the Committee deems appropriate to discuss any matters that any member of the Committee or any other such individual or group believes should be discussed privately and (2) shall meet separately in executive session at least annually with each of (x) the Company’s Vice President, Chief Financial Officer and Treasurer and (y) the Company’s independent auditor. In addition, the Committee may exclude from its meetings any persons it deems appropriate in order to carry out its responsibilities.

      A majority of Committee members shall constitute a quorum. A majority of the members present at any meeting at which a quorum is present may act on behalf of the Committee. The Committee may meet by telephone or videoconference and may take action by unanimous written consent to the fullest extent permitted by the Delaware General Corporation Law.

      The Committee will cause to be kept adequate minutes of all its proceedings and will report its actions to the next meeting of the Board. Committee members will be furnished with copies of the minutes of each meeting and any action taken by unanimous consent.

Article IV.

Authority

      The Committee shall have the resources and authority necessary to discharge its duties and responsibilities as it deems appropriate. In connection therewith, the Committee shall have:

      Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Company, and the Committee will take all necessary steps to preserve the privileged nature of those communications.

Article V.

Responsibilities and Duties

      The Committee shall have the following responsibilities and duties:

Article VI.

Explanatory Note

      While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to ensure that the Company complies with laws and regulations and its internal policies, codes and procedures. It is also not the duty of the Committee to determine that the Company’s financial statements are complete and accurate and are prepared in accordance with generally accepted accounting principles, or to assess and manage the Company’s exposure to risk. The Company’s financial statements are the responsibility of management. The Company’s independent auditor is responsible for planning and conducting audits to determine whether the Company’s financial statements fairly present, in all material respects, the financial position of the Company. The Committee shall be entitled to rely on management and the independent auditor in fulfilling its oversight and other responsibilities under this charter.

Exhibit A

      Under the Sarbanes Oxley Act of 2002 (“Sarbanes-Oxley”), following an IPO, the Company’s independent auditors cannot contemporaneously provide any of the following non-audit services to the Company: