318996--8/13/2007--KEY_ENERGY_SERVICES

related topics

{debt, indebtedness, cash}

{control, financial, internal}

{product, market, service}

{gas, price, oil}

{stock, price, share}

{cost, operation, labor}

{financial, litigation, operation}

{customer, product, revenue}

{loss, insurance, financial}

{acquisition, growth, future}

{operation, international, foreign}

{cost, regulation, environmental}

{regulation, change, law}

{provision, law, control}

{condition, economic, financial}

{stock, price, operating}

Business and Debt-Related Risk Factors Our business is dependent on conditions in the oil and natural gas industry, especially oil and natural gas prices and capital expenditures by oil and natural gas companies. We may be unable to implement pricing increases on our core services. Increases in industry capacity may adversely affect our business. An economic downturn may adversely affect our business. Our business involves certain operating risks, which are primarily self-insured, and our insurance may not be adequate to cover all losses or liabilities we might incur in our operations. We are subject to the economic, political and social instability risks of doing business in certain foreign countries. We historically have experienced a high employee turnover rate. Any difficulty we experience replacing or adding workers could adversely affect our business. We may not be successful in implementing technology development and technology enhancements. We are subject to environmental, health and safety laws and regulations that expose us to potential liability. We rely on a limited number of suppliers for certain materials used in providing our pressure pumping services. We may not be able to generate sufficient cash flow to meet our debt service obligations. Our debt instruments impose restrictions on us that may affect our ability to successfully operate our business. Additional indebtedness could materially adversely affect our financial condition, results of operations and business prospects and prevent us from fulfilling our obligations under our outstanding indebtedness. We may be unable to comply with covenants contained in our senior secured credit facility, which could result in the impairment of our working capital and alter our ability to operate our business. Our business may be adversely affected if we cannot successfully execute acquisitions that we make or effectively integrate acquired operations. The trading price of our common stock could be subject to significant fluctuations. Our bylaws contain provisions that may prevent or delay a change in control. Delayed Financial Reporting-Related Risk Factors The delay in reporting our financial statements and related events has had, and will continue to have, a material adverse effect on us. Our inability to file past annual and quarterly reports with the SEC could have adverse consequences. We cannot register securities for a public offering or acquisitions until we are current in our financial reporting. We also will be unable to repurchase our common stock until we are current. We cannot be re-listed on a securities exchange until we are current in our financial reporting. Taxing authorities may determine that we owe additional taxes from previous years. If we are unable to file all financial reports by the dates currently required in our credit facility, we would have to seek a waiver from our lenders. There is no assurance such waiver would be obtained. We have identified material weaknesses in our internal control over financial reporting. These material weaknesses, if not corrected, could affect the reliability of our financial statements and have other adverse consequences. Litigation arising in connection with the restatement of our financial statements could adversely affect our financial condition and operations.

Full 10-K form ▸

318996--8/13/2007--KEY_ENERGY_SERVICES_INC