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By Tanya Rutledge
Special to the Houston Chronicle
Onshore well services contractor Key Energy Services put the finishing touches on a major turnaround effort last year, posting significant increases in revenue and earnings and carving out the No. 3 spot on the Chronicle’s 100 public company list.
The company, which was not on last year’s list, generated 2011 revenue of $1.9 billion, up 60 percent from 2010. The company also saw earnings per share jump 376 percent.
Dick Alario, Key Energy Service’s chairman, CEO and president, said the achievements were a long time coming.
He explained that the company was de-listed from the New York Stock Exchange in 2005 after accounting problems in 2003 and regulatory filing delays. It emerged from those troubles in 2007, just before the economy began a freefall that turned into a recession.
“It was a classic turnaround story except that as soon as we came out of the turbulent times and got re-listed and refinanced, it was October 2007 – six months before the recession hit,” said Alario, who joined Key Energy Services in 2004 to undertake the turnaround. “We got 2009 behind us and finally saw our fortunes improve in 2010, making 2011 a real year of growth. It was really a year of the company finally getting to stretch its legs.”
Key Energy Services, which has nearly 11,000 employees, including some 240 in Houston, owns 800 rigs that can be put out for service worldwide. It also offers a variety of other services.
Alario said last year’s growth came on two fronts: through strong demand from customers in domestic developing shale markets and from work in legacy oil fields outside the United States.
“Shale plays were such an explosive market in 2011 – it was the perfect storm for us,” he said. “We were very well set up to take advantage of this business, and as the demand for our services increased significantly, so did our revenue.”
Its international business also doubled last year as the company entered new markets, including the Middle East and Colombia, and expanded its presence in existing markets such as Mexico, Russia and Argentina. International business accounted for about 20 percent of revenue, up from 5 percent a few years ago.
Alario also said the company was better able to manage its overhead.
Rutledge is a freelance reporter.