Key Energy Moving To Houston

[JR3985]

(PRN) Key Energy Completes Sale Of Land Drilling Assets, Appoints New General Counsel And Announces Move To Houston

PRNewswire-FirstCall

MIDLAND, Texas, Jan. 18 /PRNewswire-FirstCall/ -- Key Energy Services, Inc. (NYSE: KEG) announced today it has completed the sale of the majority of its U.S. land drilling assets to Patterson-UTI Energy, Inc. (Nasdaq: PTEN) for approximately $62 million in cash. The assets include 25 active and 10 stacked land-based drilling rigs as well as related drilling equipment and a rig moving fleet. The Company will also retain working capital of approximately $10 million. ADVERTISEMENT

The Company also announced that Newton W. "Trey" Wilson III has been hired as Senior Vice President and General Counsel. Previously, Mr. Wilson served as Senior Vice President, General Counsel and Secretary of Forest Oil Corporation (NYSE: FST), where he joined in November 2000. Prior to joining Forest, Mr. Wilson was a consultant to the oil industry as well as an executive for two oil and gas companies, Union Texas Petroleum and Transco Energy Company. Mr. Wilson received a B.B.A. from Southern Methodist University in 1972 and a J.D. from the University of Texas in 1975. Mr. Wilson will be based in Houston, Texas.

The Company recently signed a lease for new office space in Houston and intends to move its executive office there over the next few months. The Company anticipates that approximately 25 employees will move to Houston this year.

Commenting on the sale, Dick Alario, Chairman and CEO, stated, "Our strategy is to focus on segments that are core to our well service business and bring value to our customers. In that regard, we concluded that the contract drilling segment was not an area in which we maintained a competitive advantage and we are very pleased at the success of this sale. Further, this transaction enhances the Company's liquidity and strengthens the balance sheet."

Mr. Alario further stated, "The Company continues to enhance its senior management team and I am very happy to announce that Trey Wilson has joined the Key team as our new General Counsel. Trey has significant industry experience and his hiring proves that the industry's best professionals are attracted to Key's fundamental strengths and the opportunity to be a part of a new management team. I also want express my sincere thanks to Key's legal team, led by Acting General Counsel Kimberly Frye, for all of their hard work during the past six months. Their hard work and dedication has measurably helped the Company navigate through the restatement process."

Mr. Alario concluded, "In the coming months, the Company will be relocating its executive office to Houston. The move will be made in order to place our executive team in closer proximity to our customers and the energy community. We will continue to have a very large presence in Midland, Texas as the majority of the Company's corporate staff is expected to remain in Midland."

Key Energy Services, Inc. is the world's largest rig-based, onshore well service company. The Company provides diversified energy operations including well servicing, contract drilling, pressure pumping, fishing and rental tool services and other oilfield services. The Company has operations in all major onshore oil and gas producing regions of the continental United States and internationally in Argentina and Egypt.

Not Much, but every little bit helps!!

[Talbot]

Are they going to build an office building I wonder? If so I hope it's not suburban, but its looks like it would be with only 25 employee's. But good news nonetheless.

[JR3985]

I believe they are moving into a building downtown, which will help the CBD market!!

[Talbot]

Oh well, then that is good news then. A lot better than constructing a suburban office park building.

[JR3985]

Effective January 20, 2005, Key Energy Services, Inc. (the "Company") entered into an office lease (the "Office Lease") with Crescent 1301 McKinney, L.P. for office space in downtown Houston, Texas consisting of approximately 25,137 square feet (or the 18th floor of the subject building). The term of the Office Lease is 126 months (10.5 years) commencing on December 15, 2005 and expiring on June 14, 2016. The monthly base rent due under the Office Lease during the term is $24,089.63 from the commencement date to June 14, 2011, and $26,184.38 thereafter until the expiration date; provided that the monthly base rent will be abated for the first six months of the lease, subject to certain conditions. In addition, the Company will be entitled to a construction allowance for a portion of the costs of leasehold improvements.

The Company has the option to extend the term of the Office Lease for two consecutive periods of five years each at a monthly base rent of 95% of the fair market value, as determined by the Company and the landlord. In addition, the Company has the option, exercisable no later than December 15, 2007, to lease the 17th floor of the subject building at the same per-square-foot rate of the original office space; provided, however, that the Company is required to lease at least 9,000 and up to 15,000 square feet (in the Company's discretion) of the 17th floor by the first day of the 19th calendar month of the initial term of the Office Lease. The Company also has the preferential right, so long as 24 months remain in the initial term of the Office Lease, to lease any office space on the 17th floor not already leased by the Company plus approximately 10,000 square feet on the 16th floor of the subject building at the time such space becomes available for direct lease to a new tenant.

The foregoing description of the Office Lease does not purport to be complete and is qualified in its entirety by reference to the Office Lease, which is attached as Exhibit 10.1 hereto, and is incorporated herein by reference.

Which building is 1301 McKinney??

[KinkaidAlum]

The old Chevron Tower in the Houston Center area.