Key Energy seeks credit facility waiver to allow for more capital spending

By Angela McDaniels

Seattle, Oct. 26 - Key Energy Services Inc. said it has asked for a waiver to increase the limit on annual capital expenditures allowed under its $547 million senior credit facility.

Due to strong customer demand, the company said it is requesting an increase to $175 million for 2005 and $200 million for 2006 from the current limit of $150 million.

Key said it is seeking flexibility to support additional investments in the company's well service, pressure pumping, rental tool, trucking and wireline services and to provide flexibility for potential international projects in 2006.

The company anticipates that cash flow from operations will be sufficient to support its capital expenditure program.

A decision is expected in early November, and Key said the waiver request is unrelated to the pending process of restating its accounts.

Key is based in Midland, Texas, and provides oilfield services in the United State and Argentina.

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