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SEC Filings

KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
Entire Document

2.   Pro Forma Entries

         (a) To record the  acquisition of WellTech using the purchase method of
accounting.  The  allocation  of the purchase  price to the acquired  assets and
liabilities of WellTech is preliminary, and therefore, subject to change.

         (b) To  eliminate  the  investment  and equity in earnings  (losses) in
Dawson  WellTech,  LLC,  ("Dawson").  WellTech's  investment  in Dawson  will be
distributed to the  shareholders and directors of WellTech prior to the proposed
merger of WellTech into Key.

         Also, to eliminate the  investment  and equity in earnings  (losses) in
Key for the common  stock of Key  currently  owned by WellTech and the equity in
earnings of Services WellTech prior to its  consolidation  during the year ended
June 30, 1995.

         If the expected distribution to WellTech directors of 205,038 shares of
Key  Common  Stock and 7,280  shares  of  Dawson  common  stock had been made on
December 31, 1995,  WellTech would have recorded a related charge to earnings of

         (c)  To  adjust  the  debt  and  accrued   interest  for  certain  debt
instruments  of Key  and  WellTech  as a  result  of  refinancing  certain  debt
instruments.  Key has a  commitment  from a  banking  institution  to  refinance
certain  debt  obligations  of the Company and  WellTech and to provide Key with
approximately $1.2 million in incremental working capital.

         Also, to adjust interest expense and debt issuance costs resulting from
(i) the  borrowings for the  acquisition  of Clint Hurt  Drilling,  and (ii) the
refinancing  of certain debt  instruments of Key and WellTech and the receipt of
working capital.

         (d) To adjust depreciation, depletion and amortization for the WellTech
West Texas assets.

         (e) To  adjust  the  minority  interest  in  losses  of a  consolidated
subsidiary  for the  operations of Servicios for the nine months ended March 31,

         (f) To record  the  estimated  savings in  general  and  administrative
expenses and operating costs due to the  Acquisitions.  The estimated savings in
expenses  is  solely a result  of  changed  circumstances  brought  about by the
consummation  of  the   Acquisitions,   principally  the  closing  of  duplicate
administrative  facilities  and  the  elimination  of  duplicate  administrative
positions, including executive positions.  Duplicative administrative facilities
expected  to be closed  consist of the  leased  executive  offices  of  WellTech
located in  Houston,  Texas.  Approximately  18  employees  are  expected  to be
effected.  Annual  general and  administrative  costs  expected to be eliminated
include salary and related benefits costs associated with the 18  administrative
office  employees  discussed  above of  approximately  $1,125,000 and additional
costs  associated  with  maintenance of that office  including  rental,  travel,
telephone and office supply expenses totaling approximately $375,000.