Energy is the key to growth for Key Energy Services, one of the US's largest well-servicing and workover companies. The company provides maintenance, workover, and recompletion of wells, primarily for onshore drilling. It provides services such as contract drilling, well completion, oilfield fluid transportation, production testing, and storage and disposal services to major and independent oil companies. Key Energy Services has a fleet of more than 780 well service rigs in the US. It also operates in Argentina, Colombia, Mexico, and the Middle East, and has stakes in a Canada-based drilling and production services company and a Russia-based drilling and workover services firm.
Key Energy Services is active in major onshore oil and gas regions of the US, including the Four Corners area, the Gulf Coast, the mid-continent area, the Rocky Mountains, and the Appalachian, Permian, and San Joaquin basins.
To complement its core drilling contracting business, the company makes strategic acquisitions to expand its product lines and geographic coverage. Case in point, in 2009 the company gainied control of Geostream, an oilfield services firm in the Russian Federation. Expanding into the Middle East, in 2010 Key Energy Services formed a joint venture in Dubai with AlMansoori Specialized Engineering, a top regional oilfield services provider.
In 2009 the global recession lowered demand for oil and gas activities, resulting in the company posting revenues that were 45% down on the previous year. In addition to the weaker revenues, the company posted significant charges related to its decision to retire 250 of its older, less efficient rigs in 2009, contributing to a major net loss for the year.
The rebounding economy, higher commodity prices, and increased oil and gas exploration and production activities, especially in the US, lifted Key Energy Services' revenues and income in 2010.
In 2010, seeing an opportunity to raise cash to pay down debt, the company sold a package of pressure pumping and wireline assets to Patterson-UTI Energy for some $238 million.
Boosting its portfolio of oilfield services, in 2011 the company bought US-based Edge Oilfield Services and Summit Oilfield Services for $307.6 million in cash and stock. The companies primarily rent frac stack equipment used to support hydraulic fracturing operations and provide well testing services and rental equipment. – less
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