Key Energy Services keeps AES (worth $40 million!)
Almost sounds like a different co., but I am still digging... here is a later PR none-the-less.
Friday January 10, 2003
Key Energy reverses decision to sell Midland-based affiliate
By Julie Breaux
Odessa American
On second thought, Key Energy will keep American Energy Services, the company announced Thursday.
Key’s letter of intent to sell its wholly owned pressure pumping operation to an undisclosed party has expired, thus terminating the potential sale, company officials said Thursday.
In reversing its decision, Key officials said they believed Midland-based AES would generate more than the $40 million asking price during the next three to five years
AES, the fourth-largest pressure pumping service in the world, has been a Key subsidiary since Key acquired Q Services Inc. for $220 million several years ago, said Jim Byerlotzer, Key’s chief operating officer.
“As we were rolling Q into our operations, we sat down with (AES) management and became impressed with their abilities and their dedication to the business and said, “ ‘Hey, let’s keep it. It fits real well with what we do,’ ” Byerlotzer said. Key Vice President and Division Manager John Carnett will lead the operation from Midland. Carnett will report directly to Byerlotzer, the company said.
Byerlotzer said Key executives decided to keep AES because its products and services fit Key’s business strategy of being a one-stop shop for contract drilling and downhole services.
AES performs numerous downhole operations including cementing, fracturing, acidizing, fluid disposal, water hauling, industrial maintenance and pipeline testing.
Key provides well servicing, contract drilling and other oilfield services and is one of the largest well service companies operating in the Permian Basin.
Francis John, Key’s chairman and chief executive, stated that Key will cut AES’ operating costs by roughly $500,000 through streamlining and consolidation and then use AES’ assets to beef up Key’s well plugging and abandonment services.
Byerlotzer said the overall impact on AES employees would be neutral.
“It will be business as usual,” Byerlotzer said.
John said with an anticipated pickup in production this year, AES will offer “significant earnings and cash flow leverage. …”
“We believe that AES will be in a position to contribute meaningfully to Key’s operating results when onshore drilling activity picks up,” John said.
AES has 207 employees who work at its corporate office in Midland, at branches in Houston, Dallas, Oklahoma City and Tulsa, Okla., and in its six service districts located throughout the Southwest.
Key has grown from 29 well service rigs in Texas in 1988 to more than 2,000 rigs worldwide and has diversified into a wide range of other oilfield services.
It is now the largest land-based services company in the country, with more than 8,000 employees and annual revenues of nearly $1-billion.
The firm has operations throughout the United States, as well as in Argentina, Egypt and Canada.
