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| 8-K - FORM 8-K - KEY ENERGY SERVICES INC | c21226e8vk.htm |
Exhibit 99.1
Key Energy Services, Inc.
News Release
News Release
| For Immediate Release: Sunday, August 7, 2011 |
Contact: Gary Russell 713-651-4434 |
Key Energy Services Announces Completion of the
Acquisition of Edge Oilfield Services and Summit Oilfield Services
Acquisition of Edge Oilfield Services and Summit Oilfield Services
HOUSTON, TX, August 7, 2011 — Key Energy Services, Inc. (NYSE: KEG) completed the previously
announced acquisition of Edge Oilfield Services, L.L.C. and Summit Oilfield Services, L.L.C.
(collectively “Edge”). Total consideration for the transaction was $307.6 million, consisting of
approximately 7.5 million shares of Key common stock and $189.7 million in cash, which includes
$26.3 million to reimburse Edge capital expenditures, net of working capital adjustments.
Edge primarily rents frac stack equipment used to support hydraulic fracturing operations and the
associated flow back of frac fluids, proppants, drilling and completion fluids, and oil and natural
gas. It also provides well testing services, rental equipment such as pumps and power swivels, and
oilfield fishing services.
Key’s Chairman, President, and CEO, Dick Alario, stated, “We are excited to complete this
transaction and welcome the Edge employees to Key. We expect Edge to increase our exposure to the
horizontal well completion markets, and we hope to leverage our broad U.S. infrastructure to
facilitate expansion of this high quality business in the coming years. We anticipate Edge’s
business will be accretive to Key’s margins and earnings beginning this year, and we will provide
additional guidance for Key’s full-year 2011 results including Edge at a later date.”
Edge’s CEO, Darrell Brewer, stated, “We are happy to have reached this milestone in our company’s
history and become a part of Key. Our employees and I look forward to continued strong growth as
part of the Key family.”
Greenhill & Co. acted as advisor to Key Energy Services, Inc. for this transaction. Tudor,
Pickering, Holt & Co. Securities, Inc. acted as advisor to Edge Oilfield Services, L.L.C. and
Summit Oilfield Services, L.L.C.
About Key Energy Services
Key Energy Services is the largest onshore, rig-based well servicing contractor based on the number
of rigs owned. Key provides a complete range of well intervention services and has operations in
all major onshore oil and gas producing regions of the continental United States and
internationally in Mexico, Colombia, the Middle East, Russia, and Argentina.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Any matters that are not of historic fact are
forward-looking statements. These forward-looking statements are based on Key’s current
expectations, estimates and projections about Key, its industry, its management’s beliefs and
certain assumptions made by management, and include statements regarding expected increases in
activity and anticipated financial performance. No assurance can be given that such expectations,
estimates or projections will prove to have been correct. Whenever possible, these “forward-looking
statements” are identified by words such as “expects,” “believes,” “anticipates” and similar
phrases.
1301 McKinney Street, Suite 1800, Houston, TX 77010
Key Energy Services, Inc.
News Release
News Release
Readers are cautioned that any such forward-looking statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that are difficult to
predict, including, but not limited to: risks associated with achieving the financial performance
anticipated by the Edge acquisition, including without limitation the forecasted EBITDA performance
for 2011, risks associated with integration of Edge’s operations into Key’s operations, risks
affecting activity levels for Key’s services, including the possibility that the perceived cyclical
recovery or future growth opportunities in Key’s industry may not materialize and may not result in
activity increases; risks that Key’s customers may not increase, or may even decrease, their
activity levels; risks relating to changes in the demand for or the price of oil and natural gas;
risks relating to increases in costs of labor, fuel, equipment and supplies employed and used in
Key’s businesses; risks relating to compliance with environmental, health and safety laws and
regulations, as well as actions by governmental and regulatory authorities; risks that Key may not
be able to execute its capital expenditure program and/or that any such capital expenditure
investments, if made, will not generate adequate returns; and other risks affecting Key’s ability
to maintain or improve operations, including its ability to maintain prices for services under
market pricing pressures, weather risks, and the impact of potential increases in general and
administrative expenses.
Because such statements involve risks and uncertainties, Key’s actual results and performance may
differ materially from the results expressed or implied by such forward-looking statements. Given
these risks and uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. Other important risk factors that may affect Key’s business, results of
operations and financial position are discussed in its most recently filed Annual Report on Form
10-K, recent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and in other
Securities and Exchange Commission filings. Unless otherwise required by law, Key also disclaims
any obligation to update its view of any such risks or uncertainties or to announce publicly the
result of any revisions to the forward-looking statements made here. However, readers should
review carefully reports and documents that Key files periodically with the Securities and Exchange
Commission.
1301 McKinney Street, Suite 1800, Houston, TX 77010