Key Energy Services Inc. said it is selling the assets of its U.S. land drilling operations to Patterson-UTI Energy Inc. for $62 million in cash and will retain $10 million in working capital of the business, net of other liabilities.
This business unit consists of 25 active rigs in the Permian Basin, San Juan Basin and Rocky Mountain regions. In addition, the company’s land drilling business includes 10 stacked rigs as well as heavy haul transport vehicles and other related drilling equipment.
The active rigs are mechanical with an average of 700 horsepower and depth ratings of 10,000 feet. The company will incur a loss on the sale but the amount of the loss cannot be determined until the company’s restatement process is complete, Key Energy said.
“Our objective is to focus on our core production services and thus, the company determined that its land drilling operations were not integral to this strategy,” said Key Energy CEO Dick Alario . “Key has been in the land drilling business for many years; however, it now represents a small component of the overall company.
“We anticipate closing the sale of this business within the next month and intend to use the proceeds for working capital purposes and to repay borrowings under our revolving credit facility.”
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