Key Energy Services, Inc.
November 8, 2017
1301 McKinney Street
Houston, TX 77010
FOR IMMEDIATE RELEASE
Key Energy Services Reports Third Quarter 2017 Earnings
HOUSTON, TX, November 8, 2017 - Key Energy Services, Inc. reported third quarter 2017 consolidated revenues of $110.7 million and a pre-tax GAAP loss of $38.3 million, or $1.90 per share. The results for the third quarter include legal fees and settlements of $11.6 million, $3.3 million of stock-based compensation expense, $5.4 million in gain on the sale of assets, including Key’s Russian operations, and $0.4 million of severance expense. Excluding these items, the Company reported a pre-tax loss of $28.4 million, or $1.41 per share.
Overview and Outlook
Key’s President and Chief Executive Officer, Robert Drummond, stated, “During the third quarter we made continued progress strategically and operationally which we believe will drive cash flow improvement in the coming months. Completions activity drove revenue improvement quarter over quarter, particularly within our coiled tubing business. We expect that the continued systematic re-deployment
of our larger coiled tubing units, coupled with the gains that we are making in our other business lines, will lead to fourth quarter revenues slightly ahead of third quarter levels despite the typical fourth quarter seasonal activity slowdowns.
Drummond continued “Our progress towards neutral free cash flow continued, and I believe that the improvements we are seeing in our business today will allow us to achieve at least free cash flow neutrality as we move through 2018. I am pleased with the growth we are seeing in coiled tubing and other completion-oriented activity in our other business segments, with completion-oriented revenue representing over a quarter of total U.S. revenue in the third quarter of 2017. I am also excited about the opportunities developing in our production services businesses and the increases in activity we’re experiencing today, particularly with our industry-leading fleet of 346 AESC Class IV and Class V rigs, the largest such fleet of rigs in the industry today. We believe this fleet of fit-for-purpose, horizontal-capable well service rigs provides us with significant earnings growth potential as the industry resumes more high-return well maintenance activity.”