Key Energy Announces Conference Call to Update Current Quarter and Long-Term Outlook
MIDLAND, Texas--(BUSINESS WIRE)--March 20, 2002--Key Energy Services, Inc. (NYSE:KEG) will host a conference call on Wednesday, March 20, 2002 at 9:00 a.m. EST to update its activity levels and earnings guidance for the March 2002 quarter and to discuss current market conditions.
To access the call, which is open to the public, please call the conference call operator at one of the following numbers: (612) 332-0107 or (612) 332-0718, 10 to 15 minutes prior to the scheduled start time, and ask for the "Key Energy Conference Call." A replay of the conference call will be available for one week. To access the replay, please call 1-800-475-6701. The access code for the replay is 632656.
The Company's weekly rig hours, which were averaging approximately 47,000 to 49,000 hours in late December and early January, have stabilized at just under 40,000 hours. In contrast, the Company's average well service rig rate has only declined approximately 3% to 4% during the March 2002 quarter from the December 2001 quarter. On the other hand, the Company's core well maintenance business remained strong in comparison to the substantial decline in the U.S. drilling rig count. The Company expects rig hours for the March 2002 quarter to fall within a range of 525,000 to 535,000 hours, as compared to its prior estimated range of 600,000 to 620,000 hours. At these current activity levels, the Company now estimates that its earnings per fully diluted share before extraordinary charges (relating to the early retirement of a portion of the Company's 14% Senior Subordinated Notes in January 2002) will be in the range of $0.00 to $0.02. It is important to note that despite the unexpected weakness in capital spending by oil and natural gas producers during the first three months of calendar 2002, the Company not only expects to continue to report positive earnings but also expects to continue to generate significant cash flow to fund its acquisitions and capital expenditures and to reduce debt.
Looking past the March 2002 quarter, Francis D. John, Chairman and CEO, stated, "Key is in a unique position in that well servicing and workovers are typically the first industry segment to experience increased activity during an industry upturn. In fact, we have already started to see signs of the market improving. Several of our 24-hour rigs, horizontal workover rig packages and drilling rigs are scheduled to resume work in April. In addition, during the March 2002 quarter we have completed or have entered into letters of intent to complete several niche acquisitions for a total consideration of approximately $36 million, which will begin contributing to our operating results in the June 2002 quarter. With the recent increase in natural gas and oil prices, most higher-end well maintenance and workover projects are now economically attractive for domestic producers. Finally, if natural gas storage levels are declining more rapidly than was anticipated, as recent data would indicate, and if industrial demand resumes its growth, the substantial recovery that we had expected in early calendar 2003 may well commence in mid-to-late summer of calendar 2002. We believe that this recovery will result in activity levels equaling or exceeding those experienced in calendar 2001." |
