From Seeking Alpha
The following is a "small cap insight" column by Sarfaraz A. Khan about a company with a market cap of less than $5 billion.
Houston, Texas based Key Energy Services (NYSE:KEG) is the biggest onshore rig-based well services contractor in terms of the number of rigs. The company has operations in all the leading energy plays of the United States from the oil markets of Permian and Bakken to the gas markets of Haynesville. The company also has international operations in Latin America, Middle East and Russia.
Key has been growing at a reasonable pace, but since Q2-2012, the firm has reported declining revenues. Key has now recorded four consecutive drops in sequential revenues. This came on the back of softness in the U.S market. Here, the drop was primarily due to the weak natural gas pricing environment and a reduction in customer spending in the oil market. The company gets more than 80% of its revenues from the U.S.
After a year of without any growth, Key is now eyeing a turnaround; its most recent quarterly results have shown the first signs of improvements. The company operates in two main segments, U.S and International. The U.S is further divided into four service area; Rig Services, Fluid Management, Coiled Tubing and Fishing & Rental services. A short description of Key's operations and its revenue breakdown for Q2-2013 are shown in the picture below.
Q2: Signs of Improvement
Key posted an across the board year-over-year drop in revenues. However, the business reported considerable sequential improvements in revenues in its two main business units; rig services and coiled tubing services ….. Read full article with figures