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SEC Filings

S-4/A
KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
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2.  ACQUISITIONS

Clint Hurt Drilling


On March 30, 1995, Key and Clint Hurt & Associates, Inc. ("CHA") entered into an
Asset Purchase  Agreement pursuant to which CHA sold to Key all of its assets in
West Texas.  Such assets mainly  consisted of four oil and gas drilling rigs and
related  equipment.   As  consideration  for  the  acquisition,   Key  paid  CHA
$1,725,000,  of which $1,000,000 was paid in cash and the balance in the form of
a $725,000  note  payable to CHA (the note was paid in full in July  1995).  Mr.
Clint Hurt entered into  consulting and  noncompetition  agreements  with Key in
consideration  for which  Key  issued  5,000  shares of Key  Common  Stock.  The
acquisition  was  accounted  for using the  purchase  method and the  results of
operations of Clint Hurt Drilling have been included in those of Key since April
1, 1995.


The Merger


In August  1995,  Key  announced  an  agreement  to  acquire,  through a merger,
WellTech.  Key  will be the  surviving  entity  in the  merger.  In the  merger,
WellTech  stockholders  will receive an  aggregate  of  4,929,962  shares of Key
Common  Stock and  warrants to purchase  750,000  shares of Key Common  Stock at
$6.75 per share. As part of the merger, 1,429,962 of the 1,635,000 shares of Key
Common Stock  currently  owned by WellTech  and  previously  issued  warrants to
purchase  250,000  shares  of Key  Common  Stock  at  $5.00  per  share  will be
cancelled.  Net  consideration  for the merger will be  3,500,000  shares of Key
Common  Stock and warrants to purchase  500,000  additional  shares.  WellTech's
principal  line of  business  is oil and gas  well  servicing  and it  currently
operates in the  Mid-Continent  and Northeast  areas of the United States and in
Argentina.  Until November 1995,  WellTech also conducted certain  operations in
Russia.  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.


3.  LONG-TERM DEBT


The  Yale E.  Key  C.I.T.  Credit  Finance  ("C.I.T.")  term  note,  ($5,463,000
approximate  principal  balance at December  31,  1995),  as  amended,  requires
principal payments of approximately $95,000, plus interest, due the first day of
each month plus a final  payment of the unpaid  balance of the note due December
31,  1996.  The  interest  rate is 2.5%  above the  stated  prime  rate (8.5% at
December 31, 1995). The note is  collateralized  by all of the assets (including
equipment and inventory) of Yale E. Key.

The Yale E. Key C.I.T. line of credit, ($3,818,000 approximate principal balance
at December 31, 1995), as amended, requires monthly payments of interest at 2.5%
above the stated prime rate (8.5% at December 31, 1995).  The  expiration of the
line of credit is December 31,1996.  The line of credit is collateralized by the
accounts  receivable  of Yale E. Key and has a maximum limit of 85% of available
accounts  receivable  or $7 million,  whichever  is less.  At December 31, 1995,
there was no credit line availability.

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