As disclosed in Key Energy Services, Inc.’s (the “Company”) Quarterly Report on Form 10-Q for the three months ended March 31, 2016, the Company believes it was in compliance with the asset coverage covenants contained in its credit facilities for the period ended as of March 31, 2016. Also as disclosed, in connection with a disagreement with its lenders over such covenants, the Company entered into a Forbearance Agreement dated May 11, 2016 (the “Term Loan Forbearance”) with certain of the lenders under its term loan facility and a Limited Consent and Forbearance Agreement dated May 11, 2016 (together with the Term Loan Forbearance, the “Forbearance Agreements”) with certain of the lenders under its ABL facility. Pursuant to the Forbearance Agreements, the applicable lenders agreed that they would forbear through June 6, 2016 from exercising remedies available to them in respect of the identified matters.

On June 6, 2016, the Company and certain of its lenders agreed to amend the Forbearance Agreements to extend the forbearance period thereunder from June 6, 2016 to June 20, 2016. As consideration for the term loan lenders’ forbearance, the Company prepaid $2.5 million in principal and accrued interest under the term loan facility. The Company remains in active discussions with its lenders and noteholders regarding transactions and alternatives designed to reduce its debt and improve its liquidity.

The foregoing description is qualified in its entirety by reference to the full text of the amendments to the Forbearance Agreements, copies of which are attached hereto as Exhibits 10.1 and 10.2, and are incorporated herein by reference.