Item
1.01. Entry into a Material Definitive Agreement.
On
September 19, 2007, Key Energy Services, LLC, a Delaware corporation and
wholly-owned subsidiary of Key Energy Services, Inc., a Maryland corporation
(collectively, “Key”) entered into a Stock Purchase Agreement (the “Purchase
Agreement”) with Charles Moncla, Jr., Moncla Family Partnership, Ltd., L.
Charles Moncla, Jr., as Trustee of the L. Charles Moncla, Jr. Charitable
Remainder Trust, Michael Moncla, Matthew Moncla, Marc Moncla, Christopher Moncla,
Bipin A. Pandya, Thomas Sandahl, Rhonda Moncla, Cain Moncla, Andrew Moncla, and
Kenneth Rothstein (collectively, the “Sellers”) and Moncla Well
Service, Inc., Moncla Marine, L.L.C., Moncla Marine
Operations, L.L.C., Moncla Marine Vessel No. 1, L.L.C., Moncla Marine
Vessel No. 2, L.L.C., Moncla Marine Vessel No. 3, L.L.C., Moncla
Marine Vessel No. 4, L.L.C., Moncla
Marine Vessel No. 5, L.L.C., Moncla Marine Vessel No. 6, L.L.C.,
Moncla Marine Vessel No. 8, L.L.C., Moncla Marine Vessel No.
9, L.L.C., Moncla Marine Crew Boats, L.L.C., Brothers Oilfield
Service & Supply, L.L.C., 4M Equipment & Leasing, L.L.C., L C
M Industries, L.L.C., Moncla Drilling, L.L.C., and Petroleum Well
Service, Inc. (collectively, the “Moncla Companies”).
Pursuant
to the terms of the Purchase Agreement, Key will buy from the Sellers the
right, title and interests in the Moncla Companies. The Moncla Companies’ assets include, but are
not limited to, 53 rigs of which 37 are daylight rigs for well servicing and
workovers and eight are twenty-four hour rigs for shallow drilling,
sidetracking and deep workovers. In
addition, the Moncla Companies operate eight barge rigs, and own rig-up, swab,
hot oil and anchor trucks, tubing testing units and rental equipment. The Moncla Companies currently operate in
Texas, Louisiana, Mississippi, Alabama and Florida. The purchase price is $145.0 million, of
which $ 112.5 million will be paid in cash at closing, with the balance
consisting of $22.5 million in notes payable to the Sellers, and the assumption
by Key of $10 million in long-term debt. The closing of the Purchase
Agreement transaction is subject to the expiration or early termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976,
as amended, and the satisfaction of other customary closing conditions.
The
foregoing description of the Purchase Agreement does not purport to be complete
and is qualified in its entirety by reference to the Purchase Agreement which
is filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated into this Item 1.01 by reference.