HOUSTON, Dec. 8, 2014 /PRNewswire/ -- Key Energy
Services, Inc. (NYSE: KEG) announced today that it has amended its
credit agreement dated March 31,
2011, (as amended, the "Credit Facility"). This
amendment modifies certain provisions of the Credit Facility,
including:
- amending the requirement that the Company maintain a
consolidated interest coverage ratio of not less than 3.00 to 1.00
by changing the minimum required ratio to not less than 2.75 to
1.00 for the quarters ending December 31,
2014 through September 30,
2015 with the ratio increasing to not less than 3.00 to 1.00
for the quarter ending December 31,
2015 and thereafter; and
- amending the requirement that the Company maintain a debt to
capitalization ratio of consolidated total funded indebtedness to
total capitalization of 45% or less by changing the maximum
required ratio to 55% for the quarter ending December 31, 2014 and thereafter; and
- modifying the definition of Consolidated EBITDA to allow for
the add back of (i) all expenses incurred during the second and
third quarters of 2014 related to the Company's compliance with the
U.S. Foreign Corrupt Practices Act ("FCPA") and (ii) up to
$50 million of additional expenses
incurred in relation to the Company's FCPA compliance commencing in
the fourth quarter of 2014 and thereafter. The add-back for the
second and third quarter will include expenses incurred in
connection with the current FCPA investigations.
In consideration for the above amendments, the Company reduced
the total commitments by the lenders under the Credit Facility from
$550.0 million to $400.0 million, which will automatically be
further reduced from $400.0 million
to $350.0 million on July 1, 2015 through the maturity of the Credit
Facility in March of 2016.
Dick Alario, Key's Chairman,
President and Chief Executive Officer stated, "We are pleased to
have completed this step in amending our existing Credit Facility
to improve our liquidity position. We will be working with our
lenders to replace our Credit Facility that matures in March 2016. Taking in to account the current
amendments made to the Credit Facility, Key's liquidity position as
of the end of the third quarter of 2014 would have been
$328.3 million, which includes cash
of $57.4 million as of the end of the
third quarter of 2014 and undrawn availability under the Credit
Facility."
Forward Looking Statements
This press release
contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements as
to 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 estimated capital
expenditures, future operational and activity expectations,
international growth, and anticipated financial performance for the
remainder of 2014. 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.
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 that Key
will be unable to achieve its financial, capital expenditure and
operational projections, including quarterly and annual projections
of revenue and/or operating income and risks that Key's
expectations regarding future activity levels, customer demand, and
pricing stability may not materialize (whether for Key as a whole
or for geographic regions and/or business segments individually);
risks that fundamentals in the U.S. oil and gas markets may not
yield anticipated future growth in Key's businesses, or could
further deteriorate or worsen from the recent market declines,
and/or that Key could experience further unexpected declines in
activity and demand for its rig service, fluid management service,
coiled tubing service, and fishing and rental service businesses;
risks relating to Key's ability to implement technological
developments and enhancements; risks relating to compliance with
environmental, health and safety laws and regulations, as well as
actions by governmental and regulatory authorities; risks relating
to compliance with the FCPA and anti-corruption laws, including
risks related to increased costs in connection with FCPA
investigations; risks affecting Key's international operations,
including risks that Key may not be able to achieve its
international growth and mobilization strategy in the foreign
countries in which Key operates; risks that Key may be unable to
achieve the benefits expected from acquisition and disposition
transactions, and risks associated with integration of the acquired
operations into Key's operations; risks, in responding to changing
or declining market conditions, that Key may not be able to reduce,
and could even experience increases in, the costs of labor, fuel,
equipment and supplies employed and used in Key's businesses; risks
relating to changes in the demand for or the price of oil and
natural gas; 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; risks
that the Company may not be able to further amend its credit
facility or find adequate financing before the maturity date of its
credit facility; 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, many
of which are outside of Key's control, 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.
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, Ecuador, the Middle
East and Russia.
Contact:
West Gotcher, Investor Relations
713-757-5539
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SOURCE Key Energy Services, Inc.