Key Energy's lenders extend waivers

By Jeff Pines

Washington, Dec. 20 - Key Energy Services Inc.'s lenders extended their waivers giving the Midland, Texas-based firm until March 31, 2005 to work on its financials, the company said.

Key Energy needs to deliver financial statements for 2003 and quarterly unaudited financial statements for the first three quarters of 2004.

The waiver will enable to company to continue borrowing on its $175 million revolving credit facility.

"It is our objective to complete the restatement process on or before March 31, 2005; however, we are not yet able to predict a specific date for completion. We will soon begin our extension discussions with the holders of our 6 3/8% and 8 3/8% senior notes," said Dick Alario, chairman and chief executive, in a news release.

Key has $150 million of 6 3/8% senior notes due May 1, 2013 outstanding and $100 million of 8 3/8% senior notes due March 1, 2008 outstanding.

Until Key gets the consent of its bondholders it will only have access to $150 million, the company said. The company reported it has $123.7 million outstanding on its revolver.

The waiver fee will cost the rig-based well service company about $437,500 and an administrative fee to the administrative agent.

Key said it has received waivers from two of its three primary equipment lessors and anticipates receiving a response to its request from the third lessor shortly.

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