Key Energy sees opportunities in production services
The company stated, "During the Q2, each of our U.S. segments generated positive Adjusted EBITDA for the first time in well over a year driven by top-line improvement, particularly in Coiled Tubing Services, and strong incremental margins in each business as the benefits of our organizational restructuring initiatives continued to emerge. Margins also benefited from some sequential pricing increases. In total, consolidated Adjusted EBITDA, excluding International results, increased by approximately $10M sequentially. While we experienced increasing activity, oil price pressure dampened the activity momentum we anticipated entering the Q2 yielding lower than anticipated activity growth. Additionally, during the Q2 we improved our liquidity position through the disposition of two non-core businesses. The proceeds realized from these divestitures, along with the removal of cash flow negative businesses, will allow us to deploy the capital to actionable return-accretive opportunities as broader market conditions and activity levels warrant these investments. Looking forward, I see significant opportunities in production services, particularly as it relates to the aging horizontal wellbore and the growing backlog of wells that have experienced deferred maintenance. We are pleased with how the Company is positioned to take advantage of these opportunities and with the incremental earnings generation capacity the Company offers today compared to the last market up-cycle. We believe when oil prices stabilize at a sufficiently economic level for our customers that activity will begin to ramp for our core production services."