Key Energy Services, Inc. has signed an agreement to sell two of its oil service businesses for $256.7 million in cash and other consideration. The deal is expected to close in the third quarter of 2010, and the company will record a pretax gain of $160 million as a result of the sale.
Key Energy Services, Inc. said that the company would sell its Pressure Pumping and Wireline businesses to Patterson-UTI Energy (PTEN). These two businesses are currently part of the company’s Production Services segment.
The Pressure Pumping business consists of approximately 214,400 hydraulic horsepower (HHP), with 85% of the horsepower used in hydraulic fracturing, and the balance for acidizing, cementing and nitrogen stimulation. The Wireline Businesses consists of twenty-six wireline units.
The management of Key Energy Services, Inc. said that it was selling the businesses so that the company could focus on more core areas.
Dick Alario, the CEO of Key Energy Services, Inc. stated, “In evaluating the growth and consolidation opportunities in our core well intervention services business and international expansion efforts, we determined that the capital in our pressure pumping and electric wireline businesses could be more effectively deployed in many of the other areas of potential opportunity before us today.”
Key Energy Services, Inc. said that the two businesses provided sales of $50.9 million and operating income of $2.5 million in the first quarter of 2010. In 2009, the business had sales of $123 million and an operating loss of $72.9 million.
For more information on the company, go to www.keyenergy.com