Key Energy could lose its NYSE listing

Key Energy Services risks losing its listing on the New York Stock Exchange if it’s unable to boost its stock price, the company disclosed Friday.

“The last year’s large drop in oil prices and the current negative commodity price outlook have weighed on the market sentiment for all oil and gas service companies but it has had a particularly hard impact on small-cap companies like Key,” CEO Dick Alario said in a statement.

The Houston-based oil field services company is the latest energy firm to receive a warning from the stock exchange as the lingering downturn in oil prices continues to strain finances and force down stock prices. Swift Energy has also been targeted for de-listing after its stock price tumbled below $1 per share and Hercules Offshore lost its listing after the shallow-water rig contractor filed for bankruptcy.

Shares of Key Energy’s stock have tumbled dramatically in the past year, falling from more than $10 a share in the spring of 2014 to trading below $1 since July 31.

The stock exchange requires a company to maintain an average closing stock price above $1 for 30 consecutive trading days to remain listed.

Key Energy said it will notify the exchange by mid-September of its plans to stay in compliance. Key could see shares of its stock climb higher if oil prices rebound or market sentiment improves,  the company may consider implementing a reverse stock split, a corporate action in which a company reduces its number of shares, Alario said in a statement. It’s a commonly used tactic by companies at risk of losing their listings to improve their stock price but it doesn’t change the company’s value.

Such an action would require approval from the company’s board of directors, Key Energy said.

Receiving a de-listing warning is an “unfortunate situation” that triggers a lengthy process to get back into compliance, but it doesn’t change the company’s business operations, Alario said in a stsatement.

“The board and I are closely monitoring the situation, and we will do what we believe is the best for the shareholders of Key,” he said.

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