Key Energy Enters Agreement to Acquire the Moncla Companies and Acquires Advanced Measurements
September 19 2007 - 6:12PM
PR Newswire (US)
HOUSTON, Sept. 19 /PRNewswire-FirstCall/ -- Key Energy Services,
Inc. (Pink Sheets: KEGS) announced today that it has entered into a
definitive agreement to acquire the Moncla Companies. The Company
also announced that it has acquired Advanced Measurements, Inc. The
Company will host an investor conference call to discuss these
transactions on Monday, September 24, 2007 at 10:00 a.m. Eastern.
Details for the conference call will be released later this week.
Moncla is one of the largest privately-owned well service companies
in the United States. Headquartered in Lafayette, Louisiana, and
with offices in Sour Lake, Texas and Sandersville, Mississippi,
Moncla operates a total of 53 rigs and employs over 900 people.
Moncla's fleet includes 37 daylight rigs for well servicing and
workovers and 8 twenty-four hour rigs for shallow drilling,
sidetracking and deep workovers. Moncla also has the largest fleet
of workover barges in the United States, with 8 barge rigs. In
addition to rigs, Moncla owns rig-up, swab, hot oil and anchor
trucks, tubing testing units and rental equipment. Moncla currently
operates in Texas, Louisiana, Mississippi, Alabama and Florida.
Revenue for Moncla during 2007 is expected to total approximately
$140 million. Key will pay $145.0 million, of which $112.0 million
will be paid in cash at closing, with the balance consisting of
notes and assumption of long-term debt. In addition, the purchase
price includes up to an additional $25 million of consideration
payable based on the performance of the business over the next five
years. Key expects to fund the cash portion of the purchase price
from cash on hand. Closing of the acquisition is subject to
antitrust regulatory clearance and other customary closing
conditions. Key expects the closing will take place in the fourth
quarter. Dick Alario, Key's Chairman and CEO, stated, "Our
acquisition of Moncla is a major step in the implementation of our
capital investment plan, which includes identifying and acquiring
strong, regional well service companies that will help Key expand
and grow our operations. Moncla represents an excellent opportunity
for Key to expand our South Louisiana operations and to begin
servicing the Mississippi market. In addition, the Moncla platform
will allow us to introduce our fishing and rental services, our
cased-hole wireline services as well as our fluid logistics
services to this region. We also expect that the acquisition should
result in modest synergies and cost savings for our combined
businesses." Mr. Alario continued, "In addition to the obvious
benefits of this transaction, I believe that the Moncla family's
reputation for quality and performance fits very well with the new
Key culture, and I am extremely pleased we were successful in
convincing the Moncla management team to join Key." Charlie Moncla,
President of Moncla, commented, "Since 1984, Moncla has served the
South Louisiana market and today we are the market leader in this
region. Our growth is a tribute to the hard work of our employees
and the great relationships we have with our customers. I am
excited that our employees will have the opportunity to work for
the market leader in our industry, and I am confident that Key will
benefit from our strong experience in the Southeast U.S. market."
Simmons & Company International served as financial advisor to
Moncla. In addition, the Company recently acquired Advanced
Measurements Inc. of Calgary, Alberta for $8.39 million, which
includes deferred cash payments of up to a maximum of $1.78
million. Key also assumed approximately $3.0 million in debt.
Advanced Measurements Inc. ("AMI") is an industry leader in the
design and production of oilfield service data acquisition, control
and information systems. AMI's advanced technology platform and
applications enable their customers to seamlessly collect job
performance and related information and digitally distribute the
information to their home offices and customers. AMI's Prophet line
of products are unique in the oilfield in that it combines database
and reporting capability with control and data acquisition to
produce a total approach to acquiring field data and turning it
into information. AMI will continue to enhance and market their
Prophet line of products to the industry which should help service
companies and operators achieve higher levels of safety and
efficiency. Dick Alario, Key's Chairman and CEO, said "Advanced
Measurements has developed the industry's most envied technology
platform and applications for the well service industry, and we
intend to leverage this technology to further commercialize our
proprietary KeyView system." Len Johnson, President of Advanced
Measurements, said "We are thrilled that our company and our
technology will become an integral part of Key Energy Services'
future. Prophet not only allows oilfield service companies to
improve the return they realize on their field assets, but also
allows them to make substantial improvements to the safety of their
operations. Having the resources and commitment of an industry
leading company like Key will provide an enormous boost to our
technology and support capabilities." Key Energy Services, Inc. is
the world's largest rig-based well service company. The Company
provides oilfield services including well servicing, pressure
pumping, fishing and rental tools, electric wireline and other
oilfield services. The Company has operations in all major onshore
oil and gas producing regions of the continental United States and
internationally in Argentina and Mexico. Certain statements
contained in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current expectations, estimates and projections about the Company,
the Company's industry, management's beliefs and certain
assumptions made by management. Whenever possible, the Company has
identified these "forward-looking statements" 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: uncertainties potentially affecting
the completion of the acquisition of the Moncla Companies,
including the need to obtain antitrust regulatory clearance; risks
whether Moncla will achieve its expected revenue in 2007 and will
achieve acceptable operating results in future periods; risks that
the Company will be unable to complete its new capital investment
plan, including that it will be unable to complete acquisitions and
integrate acquired operations and that it will be unable to new
debt financing on acceptable terms and conditions in order to
enable it to complete acquisitions or repurchase stock; possible
legal consequences of failure to file compliant SEC filings for
2003, 2004 and 2005; risks that the Company will be unable to
satisfy the requirements for re-listing on a national stock
exchange or the timing thereof; the effect of on-going financial
reporting and restatement-related expenses; possible additional tax
liabilities as a result of the restatement of financial results;
risks that the Company's efforts to remediate internal control and
accounting deficiencies will not be effective; potential financial
or other effects of on-going class action and derivative litigation
and litigation with former officers; risks affecting the ability of
the Company to maintain or improve operations, including the
ability to maintain price increases, possible over supply of new
rigs coming into the market and weather risk; and risks that the
Company will be unable to achieve budgeted financial targets and
risks affecting activity levels for rig hours including the risk
that commodity prices decline or the risk that capital budgets from
the Company's customers decrease. Readers should also refer to the
section entitled "Risk Factors" in the Annual Report on Form 10-K
for the year ended December 31, 2006, filed on August 13, 2007, for
discussion of risks to which the Company is subject. Because such
statements involve risks and uncertainties, the actual results and
performance of the Company may differ materially from the results
expressed or implied by such forward-looking statements. Given
these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. Unless otherwise
required by law, the Company 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 or documents the Company files periodically with the
Securities and Exchange Commission. Contact: John Daniel (713)
651-4300 DATASOURCE: Key Energy Services, Inc. CONTACT: John Daniel
of Key Energy Services, Inc., +1-713-651-4300 Web site:
http://www.keyenergy.com/
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