Key Energy Announces Further Debt Reduction, Investment in Argentina and Appointment of Chief Information Officer
EAST BRUNSWICK, N.J.--(BUSINESS WIRE)--Dec. 6, 2000--Key Energy Services, Inc. (NYSE: KEG) announced today that as a result of continued operational improvements and strong cash flow in all geographic areas, the Company will reduce its long term debt by approximately $12 million during the December 2000 quarter.
The Company was able to achieve this debt reduction while at the same time increasing capital expenditures in response to the strong demand for its services, particularly in natural gas producing regions.
In addition, the blended interest rate on the Company's remaining bank debt has been reduced during the December 2000 quarter. Specifically, as a result of the Company's decreased financial leverage, the Company received an automatic 75 basis point price reduction on its revolving credit facility. The Company took advantage of this price reduction by using revolver borrowings to repay fixed price term loan debt, and thereby was able to achieve a 125 basis point interest rate reduction on an additional $40 million of bank debt.
In addition, given the continued strong outlook for Key's Argentina operations, the Company announced that it will add three workover rigs to its well service operations in Argentina. The Company expects these rigs to be placed into service during the March 2001 quarter.
Key also announced today that it has appointed John C. Hood to serve as the Company's Chief Information Officer. Mr. Hood was previously employed with BP as its Business and Commercial Systems Manager in Houston. Mr. Hood will be based in Midland, Texas and will initially focus on streamlining internal financial administration, developing new technologies to improve internal operating efficiencies, and enhancing communications with Key's customers.
Francis D. John stated, "This is an exciting period for Key. We continue to meet and exceed our fiscal 2001 business plan as demonstrated by our ability to reduce debt and cash interest costs while at the same time investing in the refurbishment of additional well service and drilling rigs. The addition of John Hood from BP will provide the Company the ability to develop technology advancements in operations and communications that will enhance our value to Key's strong customer base while at the same time allow the Company to further reduce operating costs." |
