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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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Year Ended December 31, 1994 Versus Year Ended December 31, 1993

Results of Operations

Revenues

         Revenues  for 1994 of $49.0  million were $7.1 million or 13% less than
1993 revenues of $56.2  million.  The primary cause of the decrease was the sale
of WellTech's West Texas  operations to Key effective  December 1, 1993,  ($13.5
million) with  additional  decreases in WellTech's  drilling  activities and the
operations in the Eastern  region.  These  decreases  were  partially  offset by
increases  which  resulted  from  the  expansion  of  WellTech's  Mid  Continent
operations  during  1993 and the start up of its Russia  operations  in December
1993.

Operating Expenses

         Operating  expenses of $39.1 million  represented  79.6% of revenues in
1994 compared to $45.5  million or 81.1% of revenues in 1993.  The primary cause
of the decrease  related to the sale of WellTech's West Texas  operations to Key
effective  December  1993 as the gross margin of the West Texas  operations  was
generally less than WellTech's other well servicing operations. In addition, the
gross  margin of  WellTech's  Russian  operations  was  generally  greater  than
WellTech's other operations.

General and Administrative Costs


         General and  administrative  costs of $8.5 million in 1994 decreased by
$1.0 million or 11% from $9.5 million in 1993. This decrease was due to the sale
of the  West  Texas  operations  and  cost  reductions  at the  corporate  level
partially  offset by  increases  which  resulted  from the  expansion of the Mid
Continent and Eastern operations and the start up of the Russian operations.


Depreciation Expense

         The $300,000 decrease in depreciation expense from $3.1 million in 1993
to $2.8  million  in 1994  related  primarily  to the  sale  of the  West  Texas
operations.

Interest Expense


         The $2.5  million,  or 78%,  decrease  in  interest  expense  from $3.2
million in 1993 to $700,000 in 1994 related to the  conversion of  approximately
$31 million of debt into equity in January  1994.  This  reduction was partially
offset by the issuance of new debt of approximately $5.5 million during 1994.


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