Key Energy Services also has the right to purchase the other 50% of the equity interests of Geostream at a future date. Geostream will use the capital invested by Key to purchase drilling and other equipment to expand its business and service offerings.
Key’s investment in Geostream is contingent upon the approval of a Russian Federation regulatory authority. Upon receipt of regulatory approval, Key will invest approximately $18 million for a 26% equity interest in Geostream. The remaining investment of approximately $17 million is expected to occur in the first quarter of 2009, increasing Key’s total ownership to 50% of Geostream.
Dick Alario, chairman and CEO of Key Energy Services, said: This investment is another step in our plan to expand Key’s international business. The Russian market is one of the fastest growing oilfield services markets in the world and we are excited to enter this partnership with a well-respected service company like Geostream.
