Key Energy Enters Agreement to Acquire the Moncla Companies and Acquires Advanced Measurements
Share:
HOUSTON, Sept. 19 / -- Key Energy Services, Inc. announced today that it has entered into a definitive agreement to acquire the Moncla Companies. The Company also announced that it has acquired Advanced Measurements, Inc. The Company will host an investor conference call to discuss these transactions on Monday, September 24, 2007 at 10:00 a.m. Eastern. Details for the conference call will be released later this week.
Moncla is one of the largest privately-owned well service companies in the United States. Headquartered in Lafayette, Louisiana, and with offices in Sour Lake, Texas and Sandersville, Mississippi, Moncla operates a total of 53 rigs and employs over 900 people. Moncla's fleet includes 37 daylight rigs for well servicing and workovers and 8 twenty-four hour rigs for shallow drilling, sidetracking and deep workovers. Moncla also has the largest fleet of workover barges in the United States, with 8 barge rigs. In addition to rigs, Moncla owns rig-up, swab, hot oil and anchor trucks, tubing testing units and rental equipment. Moncla currently operates in Texas, Louisiana, Mississippi, Alabama and Florida. Revenue for Moncla during 2007 is expected to total approximately $140 million.
Key will pay $145.0 million, of which $112.0 million will be paid in cash at closing, with the balance consisting of notes and assumption of long-term debt. In addition, the purchase price includes up to an additional $25 million of consideration payable based on the performance of the business over the next five years. Key expects to fund the cash portion of the purchase price from cash on hand. Closing of the acquisition is subject to antitrust regulatory clearance and other customary closing conditions. Key expects the closing will take place in the fourth quarter.
Dick Alario, Key's Chairman and CEO, stated, "Our acquisition of Moncla is a major step in the implementation of our capital investment plan, which includes identifying and acquiring strong, regional well service companies that will help Key expand and grow our operations. Moncla represents an excellent opportunity for Key to expand our South Louisiana operations and to begin servicing the Mississippi market. In addition, the Moncla platform will allow us to introduce our fishing and rental services, our cased-hole wireline services as well as our fluid logistics services to this region. We also expect that the acquisition should result in modest synergies and cost savings for our combined businesses."
Mr. Alario continued, "In addition to the obvious benefits of this transaction, I believe that the Moncla family's reputation for quality and performance fits very well with the new Key culture, and I am extremely pleased we were successful in convincing the Moncla management team to join Key."
Charlie Moncla, President of Moncla, commented, "Since 1984, Moncla has served the South Louisiana market and today we are the market leader in this region. Our growth is a tribute to the hard work of our employees and the great relationships we have with our customers. I am excited that our employees will have the opportunity to work for the market leader in our industry, and I am confident that Key will benefit from our strong experience in the Southeast U.S. market."
Simmons & Company International served as financial advisor to Moncla.
In addition, the Company recently acquired Advanced Measurements Inc. of Calgary, Alberta for $8.39 million, which includes deferred cash payments of up to a maximum of $1.78 million. Key also assumed approximately $3.0 million in debt. Advanced Measurements Inc. ("AMI") is an industry leader in the design and production of oilfield service data acquisition, control and information systems. AMI's advanced technology platform and applications enable their customers to seamlessly collect job performance and related information and digitally distribute the information to their home offices and customers. AMI's Prophet line of products are unique in the oilfield in that it combines database and reporting capability with control and data acquisition to produce a total approach to acquiring field data and turning it into information. AMI will continue to enhance and market their Prophet line of products to the industry which should help service companies and operators achieve higher levels of safety and efficiency.
Dick Alario, Key's Chairman and CEO, said "Advanced Measurements has developed the industry's most envied technology platform and applications for the well service industry, and we intend to leverage this technology to further commercialize our proprietary KeyView system."
Len Johnson, President of Advanced Measurements, said "We are thrilled that our company and our technology will become an integral part of Key Energy Services' future. Prophet not only allows oilfield service companies to improve the return they realize on their field assets, but also allows them to make substantial improvements to the safety of their operations. Having the resources and commitment of an industry leading company like Key will provide an enormous boost to our technology and support capabilities."
Key Energy Services, Inc. is the world's largest rig-based well service company. The Company provides oilfield services including well servicing, pressure pumping, fishing and rental tools, electric wireline 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 Mexico.
Source: Key Energy Services, Inc.
CONTACT: John Daniel of Key Energy Services, Inc., +1-713-651-4300
Web site: http://www.keyenergy.com/
