Key Energy To Report Revised and Higher First Quarter Earnings Per Share of $0.32 Per Share and $0.25 Per Fully-Diluted Share

Business Wire, Nov 13, 1997

EAST BRUNSWICK, N.J.--(BUSINESS WIRE)--Nov. 13, 1997--Key Energy Group, Inc. (ASE:KEG) announced that in its Form 10-Q to be filed with the Securities and Exchange Commission by November 14, 1997, it will report net income for the first quarter of $4,938,000, or $0.32 per share ($0.25 per fully-diluted share), as compared to the previously announced net earnings of $4,881,000, or $0.28 per share ($0.24 per fully-diluted share).

The increase in earnings per share (on both primary and fully-diluted bases) was primarily the result of a decrease in the weighted average number of shares outstanding during the quarter from 17,481,000 shares (21,388,000 on a fully-diluted basis) to 15,665,000 shares (20,161,000 on a fully-diluted basis). The decrease appropriately reflects: (i) the conversion of $47.4 million of 7% convertible subordinated debentures into common shares; (ii) shares issued in acquisitions; (iii) the exercise of warrants; and (iv) the impact of the private offering of $216 million of 5% convertible subordinated notes.

Key Energy Group, Inc. is a holding company with diversified energy operations including well servicing/workover services, contract drilling and oil and natural gas production. The company has operations in most major domestic onshore producing regions and in Argentina. -0-

                      Key Energy Group, Inc.
           Financial Data for the Three Month Periods Ended
                    September 30, 1997 and 1996

                                    Three Months Ended
                                      September 30,
                                    1997           1996

(Thousands, except per share data)
Revenues:
 Oilfield services               $69,498         $27,311
 Oil and gas revenues              2,154           1,525
 Oil and gas well drilling         2,823           2,324
 Other revenues, net               1,081             302
Total Revenues                    75,556          31,462

Costs and Expenses
 Oilfield services                48,239          19,700
 Oil and gas direct costs            937             513
 Oil and gas well drilling         2,263           1,881
 Depreciation and depletion
  expense                          5,147           2,095
 General and administrative
  expense                          7,701           3,527
 Interest expense                  3,438           1,350
Total Costs and Expenses          67,725          29,066

Income before minority interest
 and income taxes                  7,831           2,396
Minority interest                      0              58
Income tax expense                 2,893             784
Net Income                        $4,938          $1,554

Earnings Per Share:
 Primary                           $0.32           $0.14
 Assuming full dilution            $0.25           $0.13

Weighted Average Shares Outstanding
Primary                           15,665          10,894
Assuming full dilution            20,161          16,974

Earnings before interest expense,
 taxes, depreciation, depletion
 and amortization (EBITDA)       $16,416          $5,841
EBITDA as a percent of total
 revenues                          21.7%           18.6%
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