Key Energy Announces Operating Results for the Quarter Ended December 31, 2002
PR NEWSWIRE - February 13, 2003 07:30
MIDLAND, Texas, Feb 13, 2003 /PRNewswire-FirstCall via COMTEX/ -- Key Energy Services, Inc. (NYSE: KEG) today announced its operating results for the quarter ended December 31, 2002. The results include the operating results from Q Services which was acquired on July 19, 2002.
Operating results for the December 2002 quarter improved sequentially over the results for the September 2002 quarter. Specifically, revenues for the quarter ended December 31, 2002 totaled approximately $207 million versus revenues of approximately $202 million for the quarter ended September 30, 2002. EBITDA for the December 2002 quarter totaled approximately $40 million compared to approximately $34 million for the September 2002 quarter, which included approximately $4.6 million of unusual expense items. Net income and earnings per diluted share for the December 2002 quarter were approximately $1.1 million and $0.01, respectively, compared to a net loss and net loss per share of approximately $2.6 million and $0.02, respectively, for the September 2002 quarter (which excludes the cumulative effect of the Company's adoption of SFAS 143 in that quarter).
During the December 2002 quarter, market conditions gradually improved. Rig hours for the December 2002 quarter totaled approximately 549,000 while trucking hours for the December 2002 quarter totaled approximately 675,000. Weekly rig and trucking hours at the end of the December 2002 quarter were up 7.0% and 5.0%, respectively, over the levels experienced earlier in the quarter (excluding the weeks on which the Christmas and New Year's holidays fell). The Company's pressure pumping and fishing and rental tool operations recently acquired in connection with the Q Services acquisition also showed improved operating results during the December 2002 quarter compared to the September 2002 quarter. In addition, the Company's rig and trucking hours for the month ended January 31, 2003 totaled approximately 201,000 and 244,000, respectively, compared to approximately 178,000 and 223,000, respectively, for the month ended December 31, 2002 (which was impacted by the Christmas and New Year's holidays).
Francis D. John, Chairman and CEO, stated, "We are pleased with how well we are positioned going into 2003 and are cautiously optimistic that market conditions will continue to improve. As a result of the successful integration of Q Services and maintaining rates, we were able to show sequential quarterly improvement in operating results in the December 2002 quarter over the September 2002 quarter. We have achieved the consolidation savings and operating efficiencies anticipated when we had acquired Q Services. Most significantly, over 55% of Key's revenues are now derived from natural gas producing regions. We believe that with recent declines in natural gas storage, combined with reduced natural gas production during the past year, drilling, workover and completion activity will increase, particularly in the second half of 2003."
Mr. John continued, "During January and early February 2003, we continued to experience modest activity increases in all segments of our business. The U.S. land drilling rig count has increased by 39 rigs during the past three weeks which will result in a corresponding increase in well completion activity and should also justify more workover activity. In addition, this increase in drilling activity should bode well for our pressure pumping business and validates our decision to retain and operate that business. We currently believe that the operating results for the March 2003 quarter will improve over the operating results achieved in the December 2002 and March 2002 quarters. We have done an excellent job in strengthening our position during the industry downturn over the past year. The acquisition of Q Services, the continuation of capital spending on rig refurbishments and technology, as well as improvements in training and safety have put us in a strong competitive position and have prepared us to aggressively respond to our customers' needs, both domestically and in selected international markets."
Mr. John concluded, "Over the past three years, we have significantly strengthened our balance sheet, greatly reduced our debt and at the same time improved the quality of equipment and range of services that we can offer to our customers. We have a very clear vision of our objectives over the next three years: (1) bring our debt to capitalization ratio down to less than 25% through further debt reduction, (2) with debt reduced, be in a position to implement a share repurchase and/or dividend program, and (3) grow organically, primarily in our fishing and rental tool operations and in selected international markets." |
