Wednesday, December 17, 1997

New Jersey firm to buy local drilling company

By BRIAN BETHEL / Abilene Reporter-News

New Jersey-based Key Energy Group announced today that it has signed a letter of intent to acquire Legacy Drilling, Inc. in Abilene.

Key, one of the nation's largest well service and oilfield trucking companies, said it planned to purchase 21 land drilling rigs -- of which Legacy owns four -- for about $28 million in cash and stock.

No individual price point for Legacy was available, although the deal is expected to officially close in 30 days, said Ken Huseman, executive vice president and chief executive officer for Key Drilling.

"We are always looking for quality acquisitions that will compliment our existing operations," he said. "We thought Legacy and Key Energy would be an excellent fit."

The expected purchase follows closely on the heels of the company's acquisition of another Abilene drilling company, Win-Tex, announced in late October.

With that purchase and the impending purchase of Legacy, the company will command nine rigs.

"We can satisfy more of our customers' requirements," Huseman said. "Legacy has a very good crew, and we intend to keep every single one of them on."

In addition to the deal with Legacy, Key has entered a definitive agreement with Lubbock-based Sitton Drilling Co. to buy five rigs, and also has signed a similar letter with Four Corners Drilling Co. in New Mexico.

The 12 land drilling rigs owned by Four Corners will bring the total number of drilling rigs Key owns to 59.

Jack Loveless, president of Legacy, confirmed a letter of intent had been signed and indicated he would be leaving the company after the sale.

Huseman said Loveless "wanted to look at other opportunities and felt confident about turning his operation over to us."

The actual crew at Legacy should stay the same, he said.

Francis D. John, chairman and chief executive officer, said in a Key Energy press release that all of the company's recent acquisitions represent a view that the current strong operating conditions in the oil market will continue.

"At this point, we will probably see more individual rig addition in the Abilene area, rather than the acquisition of more companies," Huseman said. "We want to continue to build on the good reputation Legacy already had. We want to make things better."

Key Energy Group, Inc., has operations in most major domestic onshore producing regions and in Argentina.