UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 8, 2014 (December 5, 2014)
KEY ENERGY SERVICES, INC.
(Exact name of registrant as specified in its charter)
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Maryland |
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001-08038 |
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04-2648081 |
(State or other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
1301 McKinney Street, Suite 1800
Houston, Texas 77010
(Address of principal executive offices and Zip Code)
713/651-4300
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On December 5, 2014, Key Energy Services, Inc., a Maryland corporation (the Company) entered into the Second Amendment to
Credit Agreement (the Amendment) among the Company, each lender from time to time party to the Credit Agreement (as defined below), JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and
Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as Co-Documentation Agents. The Amendment, which is effective as of December 5, 2014 (the Effective Date), amends certain
provisions of the Companys credit agreement, dated as of March 31, 2011, as amended July 27, 2011 (together with all annexes, exhibits and schedules thereto, the Credit Agreement), which provides for a senior secured
credit facility (the Senior Secured Credit Facility) consisting of a revolving credit facility, letter of credit sub-facility and swing line facility of up to an aggregate principal amount of $400.0 million, all of which will mature no
later than March 31, 2016. The Senior Secured Credit Facility and the obligations thereunder are secured by substantially all of the assets of the Company and the subsidiary guarantors, and are guaranteed by certain of the Companys
existing and future domestic subsidiaries.
Among other changes, the Amendment decreased the total commitments by the lenders under the
credit facility from $550.0 million to $400.0 million on the Effective Date, which amount will automatically be further reduced from $400.0 million to $350.0 million on July 1, 2015.
The Amendment also modifies the Senior Secured Credit Facility by, among other things:
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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 the following minimum required ratio during each
corresponding period: |
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Fiscal Quarter Ending |
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Ratio |
June 30, 2011 through September 30, 2014 |
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3.00 to 1.00 |
December 31, 2014 and September 30, 2015 |
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2.75 to 1.00 |
December 31, 2015 and thereafter |
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3.00 to 1.00 |
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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 the following
percentages during each corresponding period: |
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Fiscal Quarter Ending |
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Ratio |
June 30, 2011 through March 31, 2012 |
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50% |
June 30, 2012 and September 30, 2012 |
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47.5% |
December 31, 2012 through September 20, 2014 |
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45% |
December 31, 2014 and thereafter |
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55% |
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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 Companys compliance with the U.S. Foreign
Corrupt Practices Act (FCPA) and (ii) up to $50 million of additional expenses incurred in relation to the Companys FCPA compliance commencing in the fourth quarter of 2014; and |
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modifying certain representations, warranties and covenants regarding the Companys compliance with anti-corruption laws and sanctions. |
Except as amended by the Amendment, all other provisions of the Senior Secured Credit Facility remain in full force and effect.
The description of the Amendment contained herein does not purport to be complete and is qualified in its entirety by reference to the
Amendment, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
Item 7.01.
Regulation FD Disclosure
On December 8, 2014, the Company issued a press release announcing the Amendment. A copy of the press
release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated by reference. The information contained in this Item 7.01 (including Exhibit 99.1 hereto) shall not be deemed filed for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth
by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
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10.1 |
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Second Amendment to Credit Agreement, dated as of December 5, 2014, among Key Energy Services, Inc., each of the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America,
N.A., as syndication agent, and Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as co-documentation agents. |
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99.1 |
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Press release dated December 8, 2014 reporting the credit facility amendment. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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KEY ENERGY SERVICES, INC. |
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Date: December 5, 2014 |
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By: |
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/s/ KIMBERLY R. FRYE |
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Kimberly R. Frye |
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Senior Vice President and General Counsel |
Exhibit Index
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Exhibit No. |
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Description |
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10.1 |
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Second Amendment to Credit Agreement, dated as of December 5, 2014, among Key Energy Services, Inc., each of the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America,
N.A., as syndication agent, and Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as co-documentation agents. |
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99.1 |
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Press release dated December 8, 2014 reporting the second amendment to the credit facility. |
Exhibit 10.1
SECOND AMENDMENT
TO
CREDIT AGREEMENT
dated as of December 5, 2014
among
KEY ENERGY SERVICES, INC.,
as Borrower,
THE GUARANTORS,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
Capital One, N.A.,
Wells Fargo Bank, N.A.,
Credit Agricole Corporate and Investment Bank,
and
DnB NOR Bank ASA,
as Co-Documentation Agents,
and
The Lenders Party
Hereto
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this Second Amendment) dated as of December 5, 2014, is among Key
Energy Services, Inc., a Maryland corporation (the Borrower); each of the undersigned guarantors (the Guarantors, and together with the Borrower, the Obligors); JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, together with its successors in such capacity, the Administrative Agent) for the lenders party to the Credit Agreement referred to below (collectively, the Lenders); and
the undersigned Lenders.
R E C I T A L S
A. The Borrower, the Administrative Agent and the Lenders are parties to that certain Credit Agreement dated as of March 31, 2011 (as
amended by that certain First Amendment to Credit Agreement dated as of July 27, 2011, the Credit Agreement), pursuant to which the Lenders have made certain extensions of credit available to the Borrower.
B. The Guarantors are parties to that certain Guarantee and Collateral Agreement dated as of March 31, 2011 made by each of the Grantors
(as defined therein) in favor of the Administrative Agent (the Guaranty).
C. The Borrower has requested and the
Lenders have agreed to amend certain provisions of the Credit Agreement.
D. NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms. Each capitalized term used herein but not otherwise defined herein has the meaning given such term in
the Credit Agreement. Unless otherwise indicated, all references to Sections and Articles in this Second Amendment refer to Sections and Articles of the Credit Agreement. As used herein, the term Amended Credit Agreement means the Credit
Agreement, as amended by this Second Amendment.
Section 2. Amendments to the Credit Agreement.
2.1 Amendments to Section 1.01 Certain Defined Terms.
(a) The following definitions are hereby added where alphabetically appropriate to read as follows:
Anti-Corruption Laws means all laws, rules, and regulations of any jurisdiction applicable to the Borrower
or its Subsidiaries from time to time concerning or relating to bribery or corruption.
Sanctions means
economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or
the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majestys Treasury of the United Kingdom.
Sanctioned Country means, at any time, a country or territory
which is the subject or target of any Sanctions.
Sanctioned Person means, at any time, (a) any
Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the or by the United Nations Security Council, the European
Union or any EU member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person.
Second Amendment means that certain Second Amendment to Credit Agreement, dated as of December 5, 2014,
among the Borrower, the Guarantors, the Administrative Agent and the Lenders party thereto.
Second Amendment
Effective Date means the Effective Date as such term is defined in the Second Amendment.
(b) The definition of
Consolidated EBITDA is hereby amended and restated in its entirety to read as follows:
Consolidated EBITDA
means, for any period of determination, the sum of (without duplication, the following determined on a consolidated basis: (a) Consolidated Net Income during such period plus (b) to the extent deducted from Consolidated Net Income in such
period: (i) income tax expense, (ii) franchise tax expense, (iii) Consolidated Interest Expense, (iv) amortization and depreciation during such period, (v) all non-cash charges and adjustments, (vi) non-recurring cash
expenses related to any Permitted Acquisition, (vii) expenses incurred during the fiscal quarters ending June 30, 2014 and September 30, 2014 in order to comply with the U.S. Foreign Corrupt Practices Act of 1977 and
(viii) commencing with the fiscal quarter ending December 31, 2014, expenses incurred in order to comply with the U.S. Foreign Corrupt Practices Act of 1977; provided that the aggregate amount of all add backs taken in all periods
pursuant to this clause (viii) shall not exceed $50,000,000; provided further that if the Borrower or any Subsidiary shall acquire or dispose of any Property in an aggregate amount of at least $1,000,000 during such period, then
Consolidated EBITDA shall be calculated, with calculation in form and substance satisfactory to the Administrative Agent, after giving pro forma effect to such acquisition or disposition, as if such acquisition or disposition had occurred on the
first day of such period (provided that the Administrative Agent is satisfied with the form and substance of the related projections).
(c) The definitions of Anti-Terrorism Laws, Embargoed Person, Executive Order and OFAC are
hereby deleted.
2.1 Amendment to Section 2.06. Section 2.06 is hereby amended by adding the following new subsection
(e) thereto as follows:
(e) Scheduled Reductions of Commitments. Unless previously terminated or reduced, the Commitments
shall automatically reduce without any further action (i) on the Second Amendment Effective Date, to $400,000,000 and (ii) on July 1, 2015, to $350,000,000. The terms of Section 2.06(c) shall apply to each such reduction of the
Commitments. In connection with any such reduction, the Administrative Agent may amend and restate Annex I to reflect the Commitment of each Lender, after giving effect to such reduction.
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2.2 Amendment to Section 3.04(b)(i). Section 3.04(b)(i) is hereby amended by
adding the phrase or Section 2.06(e) immediately following the phrase pursuant to Section 2.06(b) therein.
2.3 Amendment to Section 7.25. Section 7.25 is hereby amended and restated in its entirety to read as follows:
Section 7.25. Anti-Corruption Laws and Sanctions. The Borrower has implemented and maintains in effect policies and
procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective
officers and employees and to the knowledge of the Borrower its directors and agents are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects; provided, however, that no representation is made with respect
to the matters disclosed in the Current Report on Form 8-K filed on June 4, 2014 with the SEC concerning possible violations of the U.S. Foreign Corrupt Practices Act (FCPA) and other applicable laws. None of (a) the
Borrower, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the
credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other Transaction will violate Anti-Corruption Laws or applicable Sanctions.
2.4 Amendment to Section 8.09. Section 8.09 is hereby amended by adding the following sentence to the end of such Section:
The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions.
2.5 Amendment to Section 9.01(a). Section 9.01(a) is hereby amended and restated in its entirety to
read as follows:
(a) Consolidated Interest Coverage Ratio. The Borrower will not, as of the last day of any fiscal quarter, permit
its Consolidated Interest Coverage Ratio to be less than the ratio specified for such fiscal quarter as indicated in the table below:
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Fiscal Quarter Ending |
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Ratio |
June 30, 2011 through September 30, 2014 |
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3.00 to 1.00 |
December 31, 2014 through September 30, 2015 |
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2.75 to 1.00 |
December 31, 2015 and thereafter |
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3.00 to 1.00 |
2.6 Amendment to Section 9.01(d). Section 9.01(d) is hereby amended and restated in its
entirety to read as follows:
(d) Capitalization Ratio. The Borrower will not, as of the last day of any fiscal quarter, allow its
ratio of Consolidated Total Funded Indebtedness to Total Capitalization to be more than the percentage specified for such fiscal quarter as indicated in the table below:
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Fiscal Quarter Ending |
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Ratio |
June 30, 2011 through March 31, 2012 |
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50% |
June 30, 2012 and September 30, 2012 |
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47.5% |
December 31, 2012 through September 20, 2014 |
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45% |
December 31, 2014 and thereafter |
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55% |
2.7 Amendment to Section 9.07. Section 9.07 is hereby amended by adding the following
sentence to the end of such Section: The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents
shall not use, the proceeds of any Borrowing or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (C) in any manner that would result in the violation
of any Sanctions applicable to any party hereto.
2.8 Amendments to Article IX.
(a) Section 9.19 is hereby deleted in its entirety.
(b) Section 9.20 is hereby deleted in its entirety.
Section 3. Conditions Precedent. This Second Amendment shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 12.02 of the Credit Agreement) (the Effective Date):
3.1 The Administrative Agent shall have received from the Majority Lenders, the Borrower, and each of the other Obligors, counterparts (in
such number as may be requested by the Administrative Agent) of this Second Amendment signed on behalf of such Persons.
3.2 The
Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request.
3.3 No Default shall have occurred and be continuing, after giving effect to the terms of this Second Amendment.
Section 4. Miscellaneous.
4.1 Confirmation. The provisions of the Credit Agreement, as amended by this Second Amendment, shall remain in full force and effect
following the effectiveness of this Second Amendment.
4.2 Ratification and Affirmation; Representations and Warranties. Each
Obligor hereby: (a) acknowledges the terms of this Second Amendment; (b) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a party and agrees
that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby, after giving effect to the
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amendments contained herein; (c) agrees that from and after the Effective Date each reference to the Credit Agreement in the Guaranty and the other Loan Documents shall be deemed to be a
reference to the Credit Agreement, as amended by this Second Amendment; and (d) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Second Amendment: (i) all of the representations
and warranties contained in each Loan Document to which it is a party are true and correct in all material respects, unless such representations and warranties are stated to relate to a specific earlier date, in which case, such representations and
warranties shall continue to be true and correct in all material respects as of such earlier date and (ii) no Default has occurred and is continuing.
4.3 Loan Document. This Second Amendment is a Loan Document as defined and described in the Credit Agreement and all of the
terms and provisions of the Credit Agreement relating to Loan Documents shall apply hereto.
4.4 Counterparts. This Second
Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Second Amendment by
facsimile or email transmission shall be effective as delivery of a manually executed counterpart hereof.
4.5 NO ORAL AGREEMENT.
THIS SECOND AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
4.6 GOVERNING LAW. THIS SECOND AMENDMENT
(INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[SIGNATURES BEGIN NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed as
of the date first written above.
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BORROWER: |
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KEY ENERGY SERVICES, INC. |
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By: |
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/s/ J. MARSHALL DODSON |
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Name: |
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J. Marshall Dodson |
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Title: |
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Vice President and Treasurer |
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GUARANTORS: |
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KEY ENERGY SERVICES, LLC |
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By: |
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/s/ J. MARSHALL DODSON |
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Name: |
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J. Marshall Dodson |
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Title: |
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Vice President and Treasurer |
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KEY ENERGY SERVICES (MEXICO), LLC |
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By: |
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/s/ J. MARSHALL DODSON |
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Name: |
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J. Marshall Dodson |
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Title: |
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Vice President and Treasurer |
Signature Page to
Second Amendment
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ADMINISTRATIVE AGENT: |
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JPMORGAN CHASE BANK, N.A., as Administrative Agent, Issuing Bank and Lender |
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By: |
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/s/ DAVE KATZ |
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Name: |
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Dave Katz |
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Title: |
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Executive Director |
Signature Page to
Second Amendment
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LENDERS: |
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BANK OF AMERICA, N.A., as Syndication Agent and Lender |
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By: |
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/s/ REBECCAL. HETZER |
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Name: |
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Rebecca L. Hetzer |
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Title: |
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SVP |
Signature Page to
Second Amendment
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CAPITAL ONE, N.A., as Co-Documentation Agent and Lender |
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By: |
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/s/ DON BACKER |
Name: |
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Don Backer |
Title: |
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SVP |
Signature Page to
Second Amendment
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WELLS FARGO BANK, N.A., as
Co-Documentation Agent and Lender |
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By: |
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/s/ ROBERT CORDER |
Name: |
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Robert Corder |
Title: |
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Director |
Signature Page to
Second Amendment
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CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Co-Documentation Agent and Lender |
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By: |
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/s/ DAVID GURGHIGIAN |
Name: |
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David Gurghigian |
Title: |
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Managing Director |
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By: |
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./s/ MICHAEL D. WILLIS |
Name: |
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Michael D. Willis |
Title: |
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Managing Director |
Signature Page to
Second Amendment
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DNB NOR BANK ASA, as Co-Documentation Agent and Lender |
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By: |
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Name: |
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Title: |
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By: |
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Name: |
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Title: |
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Signature Page to
Second Amendment
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COMERICA BANK, as Lender |
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By: |
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/s/ BRADLEY KUHN |
Name: |
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Bradley Kuhn |
Title: |
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AVP |
Signature Page to
Second Amendment
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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Lender |
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By: |
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/s/ NUPUR KUMAR |
Name: |
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Nupur Kumar |
Title: |
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Authorized Signatory |
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By: |
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/s/ REMY RIESTER |
Name: |
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Remy Riester |
Title: |
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Authorized Signatory |
Signature Page to
Second Amendment
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MORGAN STANLEY BANK, N.A., as Lender |
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By: |
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/s/ DMITRIY BARSKIY |
Name: |
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Dmitriy Barskiy |
Title: |
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Authorized Signatory |
Signature Page to
Second Amendment
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ROYAL BANK OF CANADA, as Lender |
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By: |
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Name: |
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Title: |
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Signature Page to
Second Amendment
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THE BANK OF NOVA SCOTIA, as Lender |
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By: |
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/s/ JOHN FRAZELL |
Name: |
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John Frazell |
Title: |
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Director |
Signature Page to
Second Amendment
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AMEGY BANK, as Lender |
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By: |
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/s/ BRAD ELLIS |
Name: |
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Brad Ellis |
Title: |
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Senior Vice President |
Signature Page to
Second Amendment
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COMPASS BANK, as Lender |
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By: |
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/s/ STEPHEN SHELTON |
Name: |
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Stephen Shelton |
Title: |
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Senior Vice President |
Signature Page to
Second Amendment
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DEUTSCHE BANK TRUST COMPANY AMERICAS, as Lender |
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By: |
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/s/ DUSAN LAZAROV |
Name: |
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Dusan Lazarov |
Title: |
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Direcor |
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By: |
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/s/ MICHAEL WINTERS |
Name: |
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Michael Winters |
Title: |
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Vice President |
Signature Page to
Second Amendment
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HSBC BANK USA, N.A., as Lender |
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By: |
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Name: |
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Title: |
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Signature Page to
Second Amendment
Exhibit 99.1
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Key Energy Services, Inc.
1301 McKinney Street Suite 1800
Houston, TX 77010 |
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December 8, 2014
Contact:
West Gotcher, Investor Relations
713-757-5539 |
FOR IMMEDIATE RELEASE
Key Energy Services Enters Into Amendment to Credit Agreement
HOUSTON, TX, December 8, 2014 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:
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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 |
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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 |
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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 Companys compliance with the U.S. Foreign
Corrupt Practices Act (FCPA) and (ii) up to $50 million of additional expenses incurred in relation to the Companys 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.
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December 8, 2014 |
Dick Alario, Keys 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, Keys 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.
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December 8, 2014 |
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 Keys current expectations, estimates and projections about Key, its industry, its managements 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 Keys 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 Keys 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 Keys 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 Keys 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
Keys 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 Keys
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 Keys 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 Keys control, Keys 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 Keys 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.
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, Ecuador, the Middle East and Russia.
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