- Key Energy Services (OTCPK:KEGX) sold substantially all of its Texas and New Mexico fluid management and salt water disposal well assets for cash and the buyer assumed the assets retirement obligations.
- The company said the sale effectively completes its exit from this line of business in these states.
- The proceeds will be used to further strengthen its liquidity position and for reinvestment.
- Key’s President and CEO Marshall Dodson said “The sale of these assets represents a significant milestone in our efforts to focus Key on our core operations. While our liquidity position has already benefited from our positive operating cash flow and recovery of cash previously used to collateralize our outstanding letters of credit, the proceeds from this asset sale significantly accelerate that improvement and provide Key with additional resources to take advantage of opportunities in the market today.”
- Dodson further noted that the company was experiencing cost pressures with labor, steel and other products but expects these higher costs will be offset by further price increases in 2021 and in 2022.
- “The rationalizing of our rig fleet has continued, with roughly 350 well service rigs scrapped since the end of 2019. We expect to be at our target fleet size of around 400 rigs by the first quarter of 2022,” commented Dodson.
Source: Seeking Alpha