Print Page  Close Window

SEC Filings

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

                         BUSINESS AND PROPERTIES OF KEY

General

         Key is a holding  company with  diversified  energy  operations  in the
Permian Basin area of West Texas and New Mexico. Key was organized in April 1977
and  commenced  operations in July 1978.  Key  currently has three  wholly-owned
operating subsidiaries:  Yale E. Key, Odessa Exploration and Clint Hurt. Yale E.
Key is involved in oil field  services  and  operates  primarily  in the Permian
Basin area of West Texas and New Mexico,  performing services for both major and
independent oil companies.  Odessa Exploration,  acquired in July 1993, operates
and owns an  interest  in various oil and gas  properties  in West Texas.  Clint
Hurt,  acquired in March 1995, is involved in drilling oil and gas wells in West
Texas.

         On October 20, 1992, Key, then known as National  Environmental  Group,
Inc.  ("NEGI")  and  several  affiliated  companies,   filed  a  Joint  Plan  of
Reorganization under Chapter 11 of the Bankruptcy Code (the "Prepackaged Plan").
Under the  Prepackaged  Plan,  holders of the  various  debt  issues,  preferred
stockholders and common  stockholders of NEGI and affiliates  received shares of
Key Common  Stock in  exchange  for their  claims.  On  December  4,  1992,  the
Prepackaged  Plan  was  confirmed.  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 Key Common Stock through
a rights offering to former preferred and common  shareholders for approximately
$1.8 million in cash. See Note 3 of Notes to Consolidated  Financial  Statements
of Key.

Recent Developments


         The Merger and the Interim Operations Agreement.  On November 18, 1995,
Key and WellTech  entered into the Merger  Agreement  pursuant to which WellTech
will  merge  with and into  Key.  (See  "Proposals  to be Voted  upon at the Key
Special Meeting--Item 1: The Merger.")  Simultaneously with the execution of the
Merger Agreement,  Key and WellTech entered into an interim operations agreement
(the "Interim Operations Agreement") pursuant to which WellTech has employed Key
as an interim manager of WellTech's  business,  property and operations.  Key is
required to obtain  consent of the Interim  Committee of the  WellTech  Board of
Directors ("Interim  Committee"),  a committee charged with the oversight of the
Interim Operations  Agreement,  prior to (i) extending,  terminating or entering
into any material lease, contract or a transaction not in the ordinary course of
business on behalf of  WellTech,  (ii) hiring or  terminating  executive  or key
officers of  WellTech,  or (iii) making or  committing  to any loan on behalf of
WellTech.  In addition,  Key is required to consult  regularly  with the Interim
Committee concerning the business,  property and operations of WellTech, provide
such  reports as are  requested  and take no action  requiring  approval  of the
WellTech  Board of Directors  under  Delaware  law, the WellTech  Charter or the
WellTech  By-Laws  without  first  obtaining  the Interim  Committee's  consent.

                                      -32-