Key Energy Services has acquired Western Drilling for approximately $51 million in cash. Key will retain net working capital of approximately $5 million and will not assume any debt of Western Drilling.
Western Drilling provides well service and horizontal drilling services, with all operations conducted in California. Western owns 22 working well service rigs, including six heavy-duty 24-hour rigs that are used for horizontal drilling projects.
Other assets owned by Western include three stacked well service rigs and rental equipment used in the workover and rig relocation process. The Western Drilling business is expected to contribute annual revenues of approximately $38 million and the operations will be integrated into Key’s existing California division.
Dick Alario, chairman and CEO of Key Energy Services, said: We are excited to continue our expansion into the oil-rich California market. The Western Drilling assets are a great complement to our December acquisition of the well service assets of Kings Oil Tools, and with this acquisition we believe that we are now the market leader in California with 161 working rigs, making Key the largest well service provider to all large oil and gas producers in the state.