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SEC Filings

KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
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The confirmation of the Prepackaged Plan converted approximately $7.4 million in
debt, approximately $700,000 in accrued interest,  1,150,664 shares of preferred
stock  and  17,942,108  shares of common  stock of NEGI into  approximately  4.2
million  shares of Key Common  Stock.  In  addition,  Key issued an aggregate of
970,000 shares of Common Stock through a rights offering to former preferred and
common shareholders for approximately $1.8 million in cash.

The sum of the allowed claims plus post-petition  liabilities exceeded the value
of  preconfirmation  assets.  Also,  Key  experienced  a change  in  control  as
pre-reorganization  equity holders  received less than 50% of the new Key Common
Stock issued pursuant to the Prepackaged Plan.

As a result of these  circumstances,  Key was  required  to adopt AICPA SOP 90-7
("SOP  90-7"),  Financial  Reporting  by  Entities in  Reorganization  Under the
Bankruptcy  Code.  SOP 90-7 requires that a new reporting  entity be created and
assets and  liabilities  be  recorded  at their  fair  values.  This  accounting
treatment is referred to in this report as "fresh start reporting". "Fresh start
reporting"   reorganization   value  was  determined   with  the  assistance  of
independent  advisors.  The methodology  employed involved  estimation of values
(i.e., the market values of Key's assets,  liabilities and equity),  taking into
account a discounted  cash flow analysis.  The discounted cash flow analysis was
based on ten-year cash flow projections prepared by management.  Cash flows were
discounted at a debt-free cost of equity of 10.0%.  Terminal  value  calculation
was based on 50% of the discounted ten-year cash flow projection assumed above.

The ten-year cash flow projections were based on estimates and assumptions about
circumstances  and events  that have not yet taken  place.  Such  estimates  and
assumptions  are  inherently  subject to  significant  economic and  competitive
uncertainties and contingencies  beyond the control of Key,  including,  but not
limited to, those with respect to the future courses of Key's business activity.
Accordingly,  there will usually be differences  between  projections and actual
results  because events and  circumstances  frequently do not occur as expected,
and those differences may be material.

The "fresh start  reporting"  referred to above was reflected as of November 30,
1992.  Commencing  with  the  seven  months  ended  June  30,1993,  consolidated
financial  statements have been prepared as if Key is a new reporting  entity. A
black line, therefore, separates the seven month period ended June 30, 1993 from
prior period information since it has not been prepared on a comparable basis of