Key Energy Closes $400 Million Credit Facility

Key Energy Services, on November 29, 2007, closed a new $400 million five-year Senior Secured Revolving Credit Facility. The facility will be secured by substantially all of the Company's assets and will be available for acquisitions, share repurchases, letters of credit and general corporate purposes. The facility includes affirmative and negative covenants and events of default typical for a facility of this type, as well as total leverage and interest coverage covenants. In addition, the Company will be allowed to repurchase its common stock; however, share repurchases in excess of $200 million can be made only if the Company's debt to capitalization ratio is below 50%. The Company anticipates that it will take a charge of up to $9.6 million in the December 2007 quarter, which is associated with the acceleration of deferred debt issuance costs due to termination of the Company's prior credit facility and term loan.

Bank of America Securities, LLC and Wells Fargo Bank, N.A. served as Joint Lead Arrangers for the new credit facility.