Key Energy Services Sells Its Fluid Management Services Assets
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Key Energy Services has sold substantially all of its Texas and New Mexico fluid management and salt water disposal well assets for cash and the assumption by the buyer of the related asset retirement obligations. The sale effectively completes the company’s exit from this line of business in these states.
Key’s President and Chief Executive Officer, Marshall Dodson released the following statement:
“The sale of these assets represents a significant milestone in our efforts to focus Key on our core operations. While our liquidity position has already benefited from our positive operating cash flow and recovery of cash previously used to collateralize our outstanding letters of credit, the proceeds from this asset sale significantly accelerate that improvement and provide Key with additional resources to take advantage of opportunities in the market today.
I want to thank the employees impacted by this transaction for their hard work and dedication to Key over the years and we wish them much future success.
Our current levels of activity are the highest Key has seen since November of 2019. Although we continue to benefit from improving demand for our services, shortages of qualified employees and the impacts of COVID continue to weigh on our recovery.
Financially, with higher activity, net pricing improvements and reduced cost structure we continue to generate positive operating cash flow. We are experiencing cost pressures with labor, steel and other products, however, we expect that these higher costs will be offset by further price increases in 2021 and in 2022.
The rationalizing of our rig fleet has continued, with roughly 350 well service rigs scrapped since the end of 2019. We expect to be at our target fleet size of around 400 rigs by the first quarter of 2022.”
Finally, I want to thank our team for continuing to provide our customers best in class service and equipment and doing so safely. Key would not be in the strong position we are in today without the dedication, effort and professionalism of my fellow employees.”
About Key Energy Services
Key Energy Services is a leading onshore, rig-based well servicing contractor and provides a complete range of well intervention services with operations in all major onshore oil and gas producing regions of the continental United States.
To stop by Key Energy Services’ website, CLICK HERE
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