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SEC Filings

S-4/A
KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
Entire Document
 
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17.  CONCENTRATIONS OF CREDIT RISK

Key has a concentration of customers in the oil and gas industry.  Substantially
all of Key's  customers are major  integrated oil companies,  major  independent
producers  of oil and gas and  smaller  independent  producers.  This may affect
Key's overall exposure to credit risk either positively or negatively,  inasmuch
as its  customers  are  effected  by  economic  conditions  in the  oil  and gas
industry, which has historically been cyclical. However, accounts receivable are
well  diversified  among  many  customers  and  a  significant  portion  of  the
receivables are from major oil companies,  which management  believes  minimizes
potential  credit risk.  Historically,  credit  losses have been  insignificant.
Receivables are generally not collateralized,  although Key may generally secure
a receivable at any time by filing a mechanic's  and  materialmans'  lien on the
well serviced.

18.  SUBSEQUENT EVENT


In August  1995,  Key  announced  an  agreement  to  acquire,  through a merger,
WellTech.  A definitive  merger  agreement was reached on November 18, 1995. Key
will be the surviving entity in the Merger. Consideration for the Merger will be
4,929,962  shares of Key Common Stock and warrants to purchase 750,000 shares at
$6.75 per share of Key Common  Stock.  As part of the Merger,  1,429,962  of the
1,635,000  shares of Key Common Stock owned by WellTech and warrants to purchase
an  aggregate  250,000  shares of Key  Common  Stock at $5.00 per share  will be
cancelled.  WellTech  currently operates in the Southwest and Northeast areas of
the United  States and in Russia and  Argentina.  Consummation  of the Merger is
subject to satisfaction of various  conditions  including,  without  limitation,
shareholder  approval  and no  assurance  can be given that the  Merger  will be
consummated.  WellTech's  principal  line  of  business  is  oil  and  gas  well
servicing.




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