Key Energy Announces Record Rig Hours and Earnings
EAST BRUNSWICK, N.J.--(BUSINESS WIRE)--April 17, 2001--Key Energy Services, Inc. (NYSE: KEG) today announced that its financial and operating results for the March 2001 quarter were significantly stronger than anticipated. Net income increased to approximately $17.4 million, or $0.17 per diluted share, compared to a loss of $4.2 million, or ($0.05) per share, for the same period last year.
EBITDA for the quarter reached record levels, rising 96% to approximately $61.4 million for the three months ended March 31, 2001 from approximately $31.3 million for the quarter ended March 31, 2000. EBITDA for the nine months ended March 31, 2001 increased 95% to approximately $159.7 million as compared to $81.8 million for the nine months ended March 31, 2000.
The improved operating results reflect strong demand for drilling and well service equipment in all of the Company's domestic and international markets. Total rig hours reached a record high of approximately 737,000 hours for the March 2001 quarter, an increase of 8% over the 682,000 hours recorded in the December 2000 quarter and an increase of 22% over the 607,000 hours recorded during the March 2000 quarter.
In response to anticipated strong demand for drilling and well service equipment through calendar year 2001, the Company increased capital spending on its rig and truck refurbishment program and technology initiative to over $23 million during the March 2001 quarter.
During the quarter, the Company continued to reduce its debt and ongoing interest expense. Total interest expense decreased to $13.5 million ($12.6 million cash interest expense), compared to total interest expense of $18.6 million for the same period last year. With recent debt repayments, the Company's net debt to capitalization is now under 55.0% and decreasing.
Francis D. John, the Company's Chairman and Chief Executive Officer, commented on the quarter, "The demand for natural gas appears to be strong through the remainder of calendar year 2001 and into 2002. Oil and gas producers substantially increased capital spending during the March quarter, which is historically the Company's most unpredictable. This year, however, producers appear more confident of future commodity prices as illustrated by several of our major customers requesting multi-year guaranteed contracts for both well service and drilling equipment. The rapidly escalating demand for workable rigs, particularly the Company's drilling rigs and deep gas workover rigs, has resulted in rate increases in all of our operating areas, which in turn has pushed margins to record levels."
Mr. John continued, "We are using the increased cash flow resulting from the favorable demand for our services, combined with the higher rig rates, to aggressively refurbish working and stacked rigs. We have refurbished 148 rigs since January 1, 2000 and have been particularly focused on reactivating our market-leading 500 horsepower and larger series rigs that are used for deep gas well completions and workovers. Key is uniquely positioned to offer low risk internal growth through the reactivation of its substantial fleet of idle equipment. As a result, we expect that the results for the June 2001 quarter will show continued growth in hours, revenues and net income." |
