10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 _____________________________________________

Form 10-Q

 _____________________________________________ 

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-08038

  _____________________________________________

KEY ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)

  _____________________________________________

Maryland	04-2648081
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1301 McKinney Street, Suite 1800, Houston, Texas	77010
(Address of principal executive offices)	(Zip Code)

(713) 651-4300

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

  _____________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

As of July 26, 2013, the number of outstanding shares of common stock of the registrant was 152,441,917.

KEY ENERGY SERVICES, INC.

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended June 30, 2013

Part I — Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	50
Part II — Other Information
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	51

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to statements of historical fact, this report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature or that relate to future events and conditions are, or may be deemed to be, forward-looking statements. These “forward-looking statements” are based on our current expectations, estimates and projections about Key Energy Services, Inc. and its wholly owned and controlled subsidiaries, our industry and management’s beliefs and assumptions concerning future events and financial trends affecting our financial condition and results of operations. In some cases, you can identify these statements by terminology such as “may,” “will,” “should,” “predicts,” “expects,” “believes,” “anticipates,” “projects,” “potential” or “continue” or the negative of such terms and other comparable terminology. These statements are only predictions and are subject to substantial risks and uncertainties and not guarantees of performance. Future actions, events and conditions and future results of operations may differ materially from those expressed in these statements. In evaluating those statements, you should carefully consider the information above as well as the risks outlined in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012.

We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of this report except as required by law. All of our written and oral forward-looking statements are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements.

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)

	June 30, 2013			December 31, 2012
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	24,735		$	45,949
Accounts receivable, net of allowance for doubtful accounts of $3,903 and $2,860, respectively	433,136			404,390
Inventories	39,860			38,622
Other current assets	122,136			100,833
Total current assets	619,867			589,794
Property and equipment	2,575,041			2,528,578
Accumulated depreciation	(1,180,448		)	(1,091,904		)
Property and equipment, net	1,394,593			1,436,674
Goodwill	624,858			626,481
Other intangible assets, net	50,516			60,905
Deferred financing costs, net	15,301			16,628
Deposits	8,131			7,339
Equity method investments	947			966
Other assets	18,224			22,801
TOTAL ASSETS	$	2,732,437		$	2,761,588
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	90,272		$	104,073
Other current liabilities	174,732			200,630
Current portion of capital leases	13			393
Total current liabilities	265,017			305,096
Long-term debt	867,832			848,110
Workers' compensation, vehicular and health insurance liabilities	32,889			33,676
Deferred tax liabilities	269,025			259,453
Other non-current liabilities	28,022			27,921
Commitments and contingencies
Equity:
Common stock, $0.10 par value; 200,000,000 shares authorized, 152,443,492 and 151,069,609 shares issued and outstanding	15,244			15,108
Additional paid-in capital	952,186			925,132
Accumulated other comprehensive loss	(15,197		)	(6,148		)
Retained earnings	315,334			319,736
Total equity attributable to Key	1,267,567			1,253,828
Noncontrolling interest	2,085			33,504
Total equity	1,269,652			1,287,332
TOTAL LIABILITIES AND EQUITY	$	2,732,437		$	2,761,588

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

3

Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
REVENUES	$	411,390		$	515,997		$	839,839		$	1,002,748
COSTS AND EXPENSES:
Direct operating expenses	287,102			343,996			586,284			655,493
Depreciation and amortization expense	58,208			52,452			112,401			103,641
General and administrative expenses	57,736			58,081			120,981			118,999
Operating income	8,344			61,468			20,173			124,615
Interest expense, net of amounts capitalized	13,984			13,730			27,788			25,612
Other (income) loss, net	430			(1,380		)	(793		)	(2,409		)
Income (loss) from continuing operations before tax	(6,070		)	49,118			(6,822		)	101,412
Income tax benefit (expense)	2,298			(17,419		)	2,864			(36,232		)
Income (loss) from continuing operations	(3,772		)	31,699			(3,958		)	65,180
Loss from discontinued operations, net of tax benefit of $-, $1,501, $- and $17,855, respectively	—			(2,454		)	—			(33,359		)
Net income (loss)	(3,772		)	29,245			(3,958		)	31,821
Income (loss) attributable to noncontrolling interest	356			204			444			(410		)
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(4,128	)	$	29,041		$	(4,402	)	$	32,231
Income (loss) from continuing operations attributable to Key:
Income (loss) from continuing operations	$	(3,772	)	$	31,699		$	(3,958	)	$	65,180
Income (loss) attributable to noncontrolling interest	356			204			444			(410		)
Income (loss) from continuing operations attributable to Key	$	(4,128	)	$	31,495		$	(4,402	)	$	65,590
Earnings (loss) per share from continuing operations attributable to Key:
Basic and diluted	$	(0.03	)	$	0.21		$	(0.03	)	$	0.43
Loss per share from discontinued operations:
Basic and diluted	$	—		$	(0.02	)	$	—		$	(0.22	)
Earnings (loss) per share attributable to Key:
Basic and diluted	$	(0.03	)	$	0.19		$	(0.03	)	$	0.21
Weighted average shares outstanding:
Basic	152,384			151,087			152,175			151,110
Diluted	152,384			151,100			152,175			151,168

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

4

Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
INCOME (LOSS) FROM CONTINUING OPERATIONS	$	(3,772	)	$	31,699		$	(3,958	)	$	65,180
Other comprehensive loss, net of tax:
Foreign currency translation loss	(3,848		)	(9,573		)	(5,366		)	(2,521		)
Total other comprehensive loss, net of tax	(3,848		)	(9,573		)	(5,366		)	(2,521		)
COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS, NET OF TAX	(7,620		)	22,126			(9,324		)	62,659
Comprehensive loss from discontinued operations	—			(2,454		)	—			(33,359		)
COMPREHENSIVE INCOME (LOSS)	(7,620		)	19,672			(9,324		)	29,300
Comprehensive (income) loss attributable to noncontrolling interest	(367		)	3,952			223			1,538
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(7,987	)	$	23,624		$	(9,101	)	$	30,838

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

5

Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(3,958	)	$	31,821
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	112,401			103,784
Asset retirements and impairments	—			41,457
Bad debt expense	901			549
Accretion of asset retirement obligations	305			297
Loss from equity method investments	242			412
Amortization of deferred financing costs and premium	1,358			1,309
Deferred income tax expense (benefit)	(3,085		)	3,187
Capitalized interest	(292		)	(674		)
Loss on disposal of assets, net	848			506
Share-based compensation	9,393			8,444
Excess tax expense (benefit) from share-based compensation	1,501			(4,047		)
Changes in working capital:
Accounts receivable	(30,449		)	(20,283		)
Other current assets	4,611			(33,721		)
Accounts payable, accrued interest and accrued expenses	(40,457		)	28,316
Share-based compensation liability awards	493			1,443
Other assets and liabilities	(7,131		)	29,052
Net cash provided by operating activities	46,681			191,852
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(72,577		)	(309,328		)
Proceeds from sale of fixed assets	3,881			9,225
Acquisition of the 50% noncontrolling interest in Geostream	(14,600		)	—
Investment in Wilayat Key Energy, LLC	—			(676		)
Net cash used in investing activities	(83,296		)	(300,779		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt	—			205,000
Repayments of capital lease obligations	(379		)	(1,007		)
Proceeds from borrowings on revolving credit facility	155,000			195,000
Repayments on revolving credit facility	(135,000		)	(300,000		)
Payment of deferred financing costs	(69		)	(4,534		)
Repurchases of common stock	(3,134		)	(7,417		)
Proceeds from exercise of stock options	—			812
Excess tax (expense) benefit from share-based compensation	(1,501		)	4,047
Other financing activities	—			12,601
Net cash provided by financing activities	14,917			104,502
Effect of changes in exchange rates on cash	484			(2,738		)
Net decrease in cash and cash equivalents	(21,214		)	(7,163		)
Cash and cash equivalents, beginning of period	45,949			35,443
Cash and cash equivalents, end of period	$	24,735		$	28,280

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

6

Key Energy Services, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

NOTE 1. GENERAL

Key Energy Services, Inc., its wholly owned subsidiaries and its controlled subsidiaries (collectively, “Key,” the “Company,” “we,” “us,” “its,” and “our”) provide a full range of well services to major oil companies, foreign national oil companies and independent oil and natural gas production companies. Our services include rig-based and coiled tubing-based well maintenance and workover services, well completion and recompletion services, fluid management services, fishing and rental services, and other ancillary oilfield services. Additionally, certain rigs are capable of specialty drilling applications. We operate in most major oil and natural gas producing regions of the continental United States and have operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada.

The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The condensed December 31, 2012 balance sheet was prepared from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012 (the “2012 Form 10-K”). Certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2012 Form 10-K.

The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented herein. The results of operations for the three months and six months ended June 30, 2013 are not necessarily indicative of the results expected for the full year or any other interim period, due to fluctuations in demand for our services, timing of maintenance and other expenditures, and other factors.

We have evaluated events occurring after the balance sheet date included in this Quarterly Report on Form 10-Q and through the date on which the unaudited condensed consolidated financial statements were issued, for possible disclosure of a subsequent event.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The preparation of these unaudited condensed consolidated financial statements requires us to develop estimates and to make assumptions that affect our financial position, results of operations and cash flows. These estimates may also impact the nature and extent of our disclosure, if any, of our contingent liabilities. Among other things, we use estimates to (i) analyze assets for possible impairment, (ii) determine depreciable lives for our assets, (iii) assess future tax exposure and realization of deferred tax assets, (iv) determine amounts to accrue for contingencies, (v) value tangible and intangible assets, (vi) assess workers’ compensation, vehicular liability, self-insured risk accruals and other insurance reserves, (vii) provide allowances for our uncollectible accounts receivable, (viii) value our asset retirement obligations, and (ix) value our equity-based compensation. We review all significant estimates on a recurring basis and record the effect of any necessary adjustments prior to publication of our financial statements. Adjustments made with respect to the use of estimates relate to improved information not previously available. Because of the limitations inherent in this process, our actual results may differ materially from these estimates. We believe that the estimates used in the preparation of these interim financial statements are reasonable.

There have been no material changes or developments in our evaluation of accounting estimates and underlying assumptions or methodologies that we believe to be a “Critical Accounting Policy or Estimate” as disclosed in our 2012 Form 10-K.

Accounting Standards Adopted or Not Yet Adopted in this Report

There are no new accounting standards that have been adopted or not yet adopted in this report.

7

NOTE 3. ACQUISITION OF NONCONTROLLING INTEREST IN GEOSTREAM

On October 31, 2008, we acquired a 26% interest in OOO Geostream Services Group (“Geostream”), a limited liability company incorporated in the Russian Federation that provides a wide range of drilling, workover and reservoir engineering services for $17.4 million. On September 1, 2009, we acquired an additional 24% interest for $16.4 million, which brought our total investment in Geostream to 50% and provided us a controlling interest with representation on Geostream's board of directors. We accounted for the second investment as a business combination achieved in stages. The results of Geostream have been included in our consolidated financial statements since the initial acquisition date, with the portion outside of our control forming a noncontrolling interest.

On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream for $14.6 million. Geostream is now our wholly owned subsidiary. This acquisition of the 50% noncontrolling interest in Geostream was accounted for as an equity transaction. Therefore, changes in our ownership interest of Geostream as a result of the acquisition in the second quarter of 2013 did not result in a gain or loss transaction.

The effects of changes in our ownership interest in Geostream were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013			2012
	(in thousands)
Net Income (loss) attributable to Key	$	(4,128	)	$	29,041	$	(4,402	)	$	32,231
Transfers from the noncontrolling interest
Increase in Key's paid-in capital for purchase of the 50% noncontrolling interest in Geostream	22,432			—		22,432			—
Net transfers from noncontrolling interest	22,432			—		22,432			—
Change from net income (loss) attributable to Key and transfers from noncontrolling interest	$	18,304		$	29,041	$	18,030		$	32,231

8

NOTE 4. DISCONTINUED OPERATIONS

In September 2012, we completed the sale of our Argentina operations for approximately $12.5 million, net of transaction costs. In connection with the sale, we recognized a total loss of $85.8 million, which includes the noncash impairment charge of $41.5 million recorded in the first quarter of 2012, and a write-off of $51.9 million cumulative translation adjustment previously recorded in accumulated other comprehensive loss during the third quarter of 2012.

The following table presents the results of operations for the Argentina business sold in this transaction for the three and six months endedJune 30, 2012.

	Three Months Ended			Six Months Ended
	June 30, 2012			June 30, 2012
	(in thousands)
REVENUES	$	30,150		$	55,789
COSTS AND EXPENSES:
Direct operating expenses	28,237			54,542
Depreciation and amortization expense	—			143
General and administrative expenses	4,366			8,476
Impairment and other charges	—			41,457
Operating loss	(2,453		)	(48,829		)
Interest expense, net of amounts capitalized	86			137
Other expense, net	1,416			2,248
Loss before tax	(3,955		)	(51,214		)
Income tax benefit	1,501			17,855
Loss from discontinued operations	$	(2,454	)	$	(33,359	)

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NOTE 5. EQUITY AND NONCONTROLLING INTEREST

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2013 is as follows :

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2012	151,070		$	15,108		$	925,132		$	(6,148	)	$	319,736		$	33,504		$	1,287,332
Foreign currency translation	—		—			—			(4,699		)	—			(667		)	(5,366		)
Common stock purchases	(410	)	(42		)	(3,092		)	—						—			(3,134		)
Share-based compensation	1,783		178			9,215			—			—			—			9,393
Tax benefits from share-based compensation	—		—			(1,501		)	—			—			—			(1,501		)
Acquisition of the 50% noncontrolling interest in Geostream (Note 3)	—		—			22,432			(4,350		)	—			(31,196		)	(13,114		)
Net income (loss)	—		—			—			—			(4,402		)	444			(3,958		)
BALANCE AT JUNE 30, 2013	152,443		$	15,244		$	952,186		$	(15,197	)	$	315,334		$	2,085		$	1,269,652

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2012 is as follows :

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2011	150,733		$	15,073		$	915,400		$	(58,231	)	$	312,114	$	30,275		$	1,214,631
Foreign currency translation	—		—			—			(1,393		)	—		(1,128		)	(2,521		)
Common stock purchases	(468	)	(47		)	(7,370		)	—			—		—			(7,417		)
Exercise of stock options and warrants	89		9			803			—			—		—			812
Share-based compensation	855		86			8,358			—			—		—			8,444
Tax benefits from share-based compensation	—		—			4,047			—			—		—			4,047
Shares surrendered	(68	)	(7		)	(999		)	—			—		—			(1,006		)
Net income (loss)	—		—			—			—			32,231		(410		)	31,821
BALANCE AT JUNE 30, 2012	151,141		$	15,114		$	920,239		$	(59,624	)	$	344,345	$	28,737		$	1,248,811

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NOTE 6. SEVERANCE, CONTRACT TERMINATION AND MOBILIZATION COSTS

In the second quarter of 2013, we implemented a significant restructuring of our Fluid Management Service business and our corporate cost structure to better align them with current market conditions. As a result of this restructuring implementation, we recognized approximately $6.3 million of severance expenses in the second quarter of 2013. The severance costs were based on obligations under our existing benefit plans. Furthermore, we recognized lease cancellation fees of $1.9 million primarily related to our Fluid Management Services business. Additionally, in our international business, due to customer spending reductions in Mexico, we began redeploying idle rigs from the North Region of Mexico to higher demand markets. This redeployment included seven rigs resulting in a total equipment mobilization cost of $2.3 million. These costs are reflected in our consolidated statements of operations and include $8.3 million of Direct operating expenses and $2.2 million of General and administrative expenses. On a segment basis, $2.6 million is associated with our U.S. operations, $7.2 million is associated with our international operations and the remaining $0.7 million is associated with our Functional Support segment. We expect the accrued severance of $0.3 million, the accrued lease cancellation fees of $1.6 million, and the accrued mobilization costs of $1.2 million as of June 30, 2013 to be paid in the second half of 2013. The restructuring activities were implemented in the second quarter of 2013 and are expected to be completed by the end of 2013.

Presented below are the schedules of the activities for the liabilities recorded in connection with our restructuring by segments and in consolidation:

	Severance			Lease Cancellation Fees			Mobilization Costs			Total
	(in thousands)
U.S.
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	746			1,630			218			2,594
Payment	(724		)	—			—			(724		)
Balance as of June 30, 2013	$	22		$	1,630		$	218		$	1,870
International
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	4,843			307			2,077			7,227
Payment	(4,533		)	(307		)	$	(1,054	)	(5,894		)
Balance as of June 30, 2013	$	310		$	—		$	1,023		$	1,333
Functional Support
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	732			—			—			732
Payment	(732		)	—			—			(732		)
Balance as of June 30, 2013	$	—		$	—		$	—		$	—
Consolidated
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	6,321			1,937			2,295			10,553
Payment	(5,989		)	(307		)	(1,054		)	(7,350		)
Balance as of June 30, 2013	$	332		$	1,630		$	1,241		$	3,203

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NOTE 7. OTHER BALANCE SHEET INFORMATION

The table below presents comparative detailed information about other current assets at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other current assets:
Deferred tax assets	$	27,444	$	20,026
Prepaid current assets	25,673		27,736
Reinsurance receivable	9,660		10,217
VAT asset	36,506		32,762
Other	22,853		10,092
Total	$	122,136	$	100,833

The table below presents comparative detailed information about other current liabilities at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	36,054	$	31,708
Accrued operating expenditures	42,890		42,137
Income, sales, use and other taxes	40,152		62,709
Self-insurance reserve	34,539		35,742
Accrued interest	16,010		15,301
Insurance premium financing	2,999		8,021
Share-based compensation and other liabilities	2,088		5,012
Total	$	174,732	$	200,630

The table below presents comparative detailed information about other non-current liabilities at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	11,866	$	11,659
Environmental liabilities	6,530		4,539
Accrued rent	1,140		1,424
Accrued sales, use and other taxes	7,155		6,952
Other	1,331		3,347
Total	$	28,022	$	27,921

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NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months endedJune 30, 2013 are as follows:

	U.S.		International			Total
	(in thousands)
December 31, 2012	$	597,456	$	29,025		$	626,481
Impact of foreign currency translation	—		(1,623		)	(1,623		)
June 30, 2013	$	597,456	$	27,402		$	624,858

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The components of our other intangible assets as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
Noncompete agreements:
Gross carrying value	$	7,134		$	9,332
Accumulated amortization	(4,927		)	(5,022		)
Net carrying value	$	2,207		$	4,310
Patents, trademarks and tradename:
Gross carrying value	$	14,044		$	14,689
Accumulated amortization	(473		)	(410		)
Net carrying value	$	13,571		$	14,279
Customer relationships and contracts:
Gross carrying value	$	100,256		$	100,481
Accumulated amortization	(70,446		)	(62,143		)
Net carrying value	$	29,810		$	38,338
Developed technology:
Gross carrying value	$	9,780		$	7,583
Accumulated amortization	(4,852		)	(3,605		)
Net carrying value	$	4,928		$	3,978
Customer Backlog:
Gross carrying value	$	776		$	779
Accumulated amortization	(776		)	(779		)
Net carrying value	$	—		$	—

Of our intangible assets at June 30, 2013, $13.2 million is an indefinite-lived tradename and not subject to amortization. The weighted average remaining amortization periods and expected amortization expense for the next five years for our definite lived intangible assets are as follows:

	Weighted average remaining amortization period (years)	Expected Amortization Expense
		Remainder of 2013		2014		2015		2016		2017		2018
		(in thousands)
Noncompete agreements	1.3	$	869	$	1,338	$	—	$	—	$	—	$	—
Patents and trademarks	4.9	63		119		55		40		40		17
Customer relationships and contracts	6.6	8,477		7,952		5,090		3,439		2,368		1,120
Developed technology	17.5	282		553		505		428		288		221
Total expected intangible asset amortization expense		$	9,691	$	9,962	$	5,650	$	3,907	$	2,696	$	1,358

Certain of our goodwill and other intangible assets are denominated in currencies other than U.S. dollars and, as such, the values of these assets are subject to fluctuations associated with changes in exchange rates. Amortization expense for our intangible assets was $4.9 million and $5.8 millionfor the three months endedJune 30, 2013 and 2012, respectively, and $9.7 million and $11.6 million for the six months endedJune 30, 2013 and 2012, respectively.

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NOTE 9. LONG-TERM DEBT

As of June 30, 2013 and December 31, 2012, the components of our long-term debt were as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
6.75% Senior Notes due 2021	$	675,000		$	675,000
8.375% Senior Notes due 2014	3,573			3,573
Senior Secured Credit Facility revolving loans due 2016	185,000			165,000
Net unamortized premium on debt	4,259			4,537
Capital lease obligations	13			393
Total debt	867,845			848,503
Less current portion	(13		)	(393		)
Long-term debt and capital leases	$	867,832		$	848,110

8.375% Senior Notes due 2014

We have outstanding $3.6 million aggregate principal amount of 8.375% Senior Notes due 2014 (the “2014 Notes”). The 2014 Notes are general unsecured senior obligations and are subordinate to all of our existing and future secured indebtedness. The 2014 Notes are jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2014 Notes is payable on June 1 and December 1 of each year.

The indenture governing the 2014 Notes contains various covenants. These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions tied to the covenants of our 2011 Credit Facility (defined below). We were in compliance with these covenants at June 30, 2013.

6.75% Senior Notes due 2021

We issued $475.0 million aggregate principal amount of 6.75% Senior Notes due 2021 (the “Initial 2021 Notes”) on March 4, 2011 and issued an additional $200.0 million aggregate principal amount of the 2021 Notes (the “Additional 2021 Notes” and together with the Initial 2021 Notes, the “2021 Notes”) in a private placement on March 8, 2012 under an indenture dated March 4, 2011 (the “Base Indenture”), as supplemented by a first supplemental indenture dated March 4, 2011 and amended by a further supplemental indenture dated March 8, 2012 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). We used the net proceeds to repay senior secured indebtedness under our revolving bank credit facility. We capitalized $4.6 million of financing costs associated with the issuance of the 2021 Notes that will be amortized over the term of the notes.

On March 5, 2013, we completed an offer to exchange the $200.0 million in aggregate principal amount of unregistered Additional 2021 Notes for an equal principal amount of such notes registered under the Securities Act of 1933. All of the 2021 Notes are treated as a single class under the Indenture and as of the closing of the exchange offers bear the same CUSIP and ISIN numbers.

The 2021 Notes are general unsecured senior obligations and are effectively subordinated to all of our existing and future secured indebtedness. The 2021 Notes are or will be jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2021 Notes is payable on March 1 and September 1 of each year. The 2021 Notes mature on March 1, 2021.

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On or after March 1, 2016, the 2021 Notes will be subject to redemption at any time and from time to time at our option, in whole or in part, at the redemption prices below (expressed as percentages of the principal amount redeemed), plus accrued and unpaid interest to the applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the years indicated below:

Year	Percentage
2016	103.375	%
2017	102.250	%
2018	101.125	%
2019 and thereafter	100.000	%

At any time and from time to time before March 1, 2014, we may on any one or more occasions redeem up to 35% of the aggregate principal amount of the outstanding 2021 Notes at a redemption price of 106.75% of the principal amount, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from any one or more equity offerings provided that (i) at least 65% of the aggregate principal amount of the 2021 Notes remains outstanding immediately after each such redemption and (ii) each such redemption occurs within 180 days of the date of the closing of such equity offering.

In addition, at any time and from time to time prior to March 1, 2016, we may, at our option, redeem all or a portion of the 2021 Notes at a redemption price equal to 100% of the principal amount plus a premium with respect to the 2021 Notes plus accrued and unpaid interest to the redemption date. If we experience a change of control, subject to certain exceptions, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of purchase.

We are subject to certain negative covenants under the Indenture. The Indenture limits our ability to, among other things:

• incur additional indebtedness and issue preferred equity interests;

• pay dividends or make other distributions or repurchase or redeem equity interests;

• make loans and investments;

• enter into sale and leaseback transactions;

• sell, transfer or otherwise convey assets;

• create liens;

• enter into transactions with affiliates;

• enter into agreements restricting subsidiaries’ ability to pay dividends;

• designate future subsidiaries as unrestricted subsidiaries; and

• consolidate, merge or sell all or substantially all of the applicable entities’ assets.

These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions relating to the covenants of our 2011 Credit Facility discussed below. Substantially all of the covenants will terminate before the 2021 Notes mature if one of two specified ratings agencies assigns the 2021 Notes an investment grade rating in the future and no events of default exist under the Indenture. As of June 30, 2013, the 2021 Notes were below investment grade. Any covenants that cease to apply to us as a result of achieving an investment grade rating will not be restored, even if the credit rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants as of June 30, 2013.

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Senior Secured Credit Facility

We are party to a $550.0 million senior secured revolving bank credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as Co-Documentation Agent (as amended, the “2011 Credit Facility”), which is an important source of liquidity for us. The 2011 Credit Facility consists of a revolving credit facility, letter of credit sub-facility and swing line facility, all of which will mature no later than March 31, 2016.

The maximum amount that we may borrow under the facility may be subject to limitation due to the operation of the covenants contained in the facility. The 2011 Credit Facility allows us to request increases in the total commitments under the facility by up to $100.0 million in the aggregate in part or in full anytime during the term of the 2011 Credit Facility, with any such increases being subject to compliance with the restrictive covenants in the 2011 Credit Facility and in the Indenture governing our 2021 Senior Notes, as well as lender approval.

We capitalized $4.9 million of financing costs in connection with the execution of the 2011 Credit Facility and an additional $1.4 million related to a subsequent amendment that will be amortized over the term of the debt.

The interest rate per annum applicable to the 2011 Credit Facility is, at our option, (i) adjusted LIBOR plus the applicable margin or (ii) the higher of (x) JPMorgan’s prime rate, (y) the Federal Funds rate plus 0.5% and (z) one-month adjusted LIBOR plus 1.0%, plus in each case the applicable margin for all other loans. The applicable margin for LIBOR loans ranges from 225 to 300 basis points, and the applicable margin for all other loans ranges from 125 to 200 basis points, depending upon our consolidated total leverage ratio as defined in the 2011 Credit Facility. Unused commitment fees on the facility equal 0.50%.

The 2011 Credit Facility contains certain financial covenants, which, among other things, limit our annual capital expenditures, restrict our ability to repurchase shares and require us to maintain certain financial ratios. The financial ratios require that:

• our ratio of consolidated funded indebtedness to total capitalization be no greater than 45%;

• our senior secured leverage ratio of senior secured funded debt to trailing four quarters of earnings before interest, taxes, depreciation and amortization (as calculated pursuant to the terms of the 2011 Credit Facility, “EBITDA”) be no greater than 2.00 to 1.00;

• we maintain a collateral coverage ratio, the ratio of the aggregate book value of the collateral to the amount of the total commitments, as of the last day of any fiscal quarter of at least 2:00 to 1:00;

• we maintain a consolidated interest coverage ratio of trailing four quarters EBITDA to interest expense of at least 3.00 to 1.00; and

• we limit our capital expenditures and investments in foreign subsidiaries to $250.0 million per fiscal year, if the consolidated total leverage ratio exceeds 3.00 to 1.00.

In addition, the 2011 Credit Facility contains certain affirmative and negative covenants, including, without limitation, restrictions on (i) liens; (ii) debt, guarantees and other contingent obligations; (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property or assets; (v) loans, acquisitions, joint ventures and other investments (with acquisitions permitted so long as, after giving pro forma effect thereto, no default or event of default exists under the 2011 Credit Facility, the pro forma consolidated total leverage ratio does not exceed 4.00 to 1.00, we are in compliance with other financial covenants and we have at least $25.0 million of availability under the 2011 Credit Facility); (vi) dividends and other distributions to, and redemptions and repurchases from, equity holders; (vii) making investments, loans or advances; (viii) selling properties; (ix) prepaying, redeeming or repurchasing subordinated (contractually or structurally) debt; (x) engaging in transactions with affiliates; (xi) entering into hedging arrangements; (xii) entering into sale and leaseback transactions; (xiii) granting negative pledges other than to the lenders; (xiv) changes in the nature of business; (xv) amending organizational documents; and (xvi) changes in accounting policies or reporting practices; in each of the foregoing cases, with certain exceptions.

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We were in compliance with these covenants as of June 30, 2013. We may prepay the 2011 Credit Facility in whole or in part at any time without premium or penalty, subject to certain reimbursements to the lenders for breakage and redeployment costs. As of June 30, 2013, we had borrowings of $185.0 million outstanding under the revolving credit facility and $54.1 million of letters of credit outstanding, leaving $310.9 million of available borrowing capacity subject to compliance with the debt to capitalization limitation under the terms of the 2011 Credit Facility. The weighted average interest rate on the outstanding borrowings under the 2011 Credit Facility was 2.67% and 2.70% for the three-month periods ended June 30, 2013 and June 30, 2012, respectively, and the weighted average interest rate on the outstanding borrowing under the 2011 Credit Facility was 2.68% and 2.70% for six months endedJune 30, 2013 and June 30, 2012, respectively.

NOTE 10. OTHER (INCOME) LOSS

The table below presents comparative detailed information about our other income and expense, shown on the condensed consolidated statements of operations as “Other (income) loss, net” for the periods indicated:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)
Interest income	$	(84	)	$	(7	)	$	(95	)	$	(14	)
Foreign exchange (gain) loss	1,398			(766		)	473			(1,705		)
Other income, net	(884		)	(607		)	(1,171		)	(690		)
Total	$	430		$	(1,380	)	$	(793	)	$	(2,409	)

NOTE 11. INCOME TAXES

We are subject to U.S. federal income tax as well as income taxes in multiple state and foreign jurisdictions. Our effective tax rates on continuing operations for the three months endedJune 30, 2013 and 2012 were 37.9% and 35.5%, respectively, and 42.0% and 35.7% for the six months endedJune 30, 2013 and 2012, respectively. Our effective tax rate varies due to the mix of pre-tax profit between the U.S. and international taxing jurisdictions with varying statutory rates, the impact of permanent differences, and discrete tax adjustments, such as tax expense or benefit recognized for uncertain tax positions. The variance between our effective rate and the U.S. statutory rate reflects international profit and losses subject to varying statutory rates, the impact of permanent items, mainly non-deductible expenses such as fines and penalties, and expenses subject to statutorily imposed limitations such as meals and entertainment expenses, plus the impact of state income taxes.

As of June 30, 2013 and December 31, 2012, we had $1.2 million of unrecognized tax benefits, net of federal tax benefit, which, if recognized, would impact our effective tax rate. We recognized tax expense of less than $0.1 million for each of the three-month periods ended June 30, 2013 and 2012 related to these items. We have substantially concluded all U.S. federal and state tax matters through the year ended December 31, 2009.

We record interest and penalties related to unrecognized tax benefits as income tax expense. We have accrued a liability of $0.3 million for the payment of interest and penalties as of June 30, 2013 and December 31, 2012, respectively. We believe that it is reasonably possible that $0.7 million of our currently remaining unrecognized tax positions, each of which is individually insignificant, may be recognized in the next twelve months as a result of a lapse of statute of limitations and settlement of ongoing audits. No release of our deferred tax asset valuation allowance was made during the three or six months ended June 30, 2013 and 2012.

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NOTE 12. COMMITMENTS AND CONTINGENCIES

Litigation

Various suits and claims arising in the ordinary course of business are pending against us. We conduct business throughout the continental United States and may be subject to jury verdicts or arbitrations that result in outcomes in favor of the plaintiffs. We are also exposed to various claims abroad. We continually assess our contingent liabilities, including potential litigation liabilities, as well as the adequacy of our accruals and our need for the disclosure of these items. We establish a provision for a contingent liability when it is probable that a liability has been incurred and the amount is reasonably approximated. We have $1.6 million of other liabilities related to litigation that is deemed probable and reasonably estimated as of June 30, 2013. We do not believe that the disposition of any of these matters will result in an additional loss materially in excess of amounts that have been recorded.

During the second quarter of 2013, two lawsuits with similar allegations of violations of California's wage and hour laws were filed in California. The lawsuits allege failure to pay overtime, failure to pay minimum wages, improper payroll deductions, failure to pay final wages in a timely manner, and violations of the California meal and break period laws, among other claims. We intend to vigorously investigate and defend these actions; however, because these cases are in the very early stages, we cannot predict the outcome of these lawsuits at this time and, accordingly, cannot estimate any possible loss or range of loss.

Self-Insurance Reserves

We maintain reserves for workers’ compensation and vehicle liability on our balance sheet based on our judgment and estimates using an actuarial method based on claims incurred. We estimate general liability claims on a case-by-case basis. We maintain insurance policies for workers’ compensation, vehicle liability and general liability claims. These insurance policies carry self-insured retention limits or deductibles on a per occurrence basis. The retention limits or deductibles are accounted for in our accrual process for all workers’ compensation, vehicular liability and general liability claims. As of June 30, 2013 and December 31, 2012, we have recorded $67.4 million and $69.4 million, respectively, of self-insurance reserves related to workers’ compensation, vehicular liabilities and general liability claims. Partially offsetting these liabilities, we had $19.6 million and $20.6 million of insurance receivables as of June 30, 2013 and December 31, 2012, respectively. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued for existing claims.

Environmental Remediation Liabilities

For environmental reserve matters, including remediation efforts for current locations and those relating to previously disposed properties, we record liabilities when our remediation efforts are probable and the costs to conduct such remediation efforts can be reasonably estimated. While our litigation reserves reflect the application of our insurance coverage, our environmental reserves do not reflect management’s assessment of the insurance coverage that may apply to the matters at issue. As of June 30, 2013 and December 31, 2012, we have recorded $6.5 million and $4.5 million, respectively, for our environmental remediation liabilities. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued.

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NOTE 13. EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is determined by dividing net earnings attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted earnings (loss) per common share is based on the increased number of shares that would be outstanding assuming conversion of potentially dilutive outstanding securities using the treasury stock and “as if converted” methods.

The components of our earnings (loss) per share are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(in thousands, except per share amounts)
Basic EPS Calculation:
Numerator
Income (loss) from continuing operations attributable to Key	$	(4,128	)	$	31,495		$	(4,402	)	$	65,590
Loss from discontinued operations, net of tax	—			(2,454		)	—			(33,359		)
Income (loss) attributable to Key	$	(4,128	)	$	29,041		$	(4,402	)	$	32,231
Denominator
Weighted average shares outstanding	152,384			151,087			152,175			151,110
Basic earnings (loss) per share from continuing operations attributable to Key	$	(0.03	)	$	0.21		$	(0.03	)	$	0.43
Basic loss per share from discontinued operations	—			(0.02		)	—			(0.22		)
Basic earnings (loss) per share attributable to Key	$	(0.03	)	$	0.19		$	(0.03	)	$	0.21
Diluted EPS Calculation:
Numerator
Income (loss) from continuing operations attributable to Key	$	(4,128	)	$	31,495		$	(4,402	)	$	65,590
Loss from discontinued operations, net of tax	—			(2,454		)	—			(33,359		)
Income (loss) attributable to Key	$	(4,128	)	$	29,041		$	(4,402	)	$	32,231
Denominator
Weighted average shares outstanding	152,384			151,087			152,175			151,110
Stock options	—			13			—			58
Total	152,384			151,100			152,175			151,168
Diluted earnings (loss) per share from continuing operations attributable to Key	$	(0.03	)	$	0.21		$	(0.03	)	$	0.43
Diluted loss per share from discontinued operations	—			(0.02		)	—			(0.22		)
Diluted earnings (loss) per share attributable to Key	$	(0.03	)	$	0.19		$	(0.03	)	$	0.21

Stock options, warrants and stock appreciation rights (“SARs”) are included in the computation of diluted earnings per share using the treasury stock method. Restricted stock awards are legally considered issued and outstanding when granted and are included in basic weighted average shares outstanding. The diluted earnings per share calculations for the three and six months ended June 30, 2013 excluded the potential exercise of 1.7 million stock options and 0.3 million SARs, because of our net loss from continuing operations in the first and second quarters of 2013. The diluted earnings per share calculation for the three and six months ended June 30, 2012 excluded the potential exercise of 1.9 million and 1.5 million stock options, respectively, because their exercise prices exceeded the average price of our stock during those periods. For each of the three and six month periods ended June 30, 2012, 0.4 million of our SARs were anti-dilutive. No events occurred after June 30, 2013 that would materially affect the number of weighted average shares outstanding.

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NOTE 14. SHARE-BASED COMPENSATION

We recognized employee share-based compensation expense of $2.2 million during each of the three months endedJune 30, 2013 and 2012, and the related income tax benefit recognized was $0.9 million and $0.8 million for the same periods. We recognized employee share-based compensation expense of $8.1 million and $8.3 million during the six months endedJune 30, 2013 and 2012, respectively, and the related income tax benefit recognized was $3.1 million and $3.0 million, respectively, for the same period. We did not capitalize any share-based compensation during the three and six months ended June 30, 2013 and 2012.

The unrecognized compensation cost related to our unvested restricted stock as of June 30, 2013 is estimated to be $14.3 million and is expected to be recognized over a weighted- average period of 1.4 years. We do not have unrecognized cost related to our unvested stock options as of June 30, 2013. No phantom stock was outstanding as of June 30, 2013.

During May 2013, we issued 288,780 shares of common stock to our outside directors under the Key Energy Services, Inc. 2012 Equity and Cash Incentive Plan that was approved by our stockholders on May 18, 2013. These shares vested immediately and we recognized $1.8 million of expense related to these awards.

On January 21, 2013, the Compensation Committee of the Board of Directors adopted the Performance Unit Award Agreement (the “2012 PU Award Agreement”) under the Key Energy Services, Inc. 2012 Equity and Cash Incentive Plan (the“2012 Plan”) and the 2013 Performance Unit Plan (the “2013 PU Plan”). We believe that the 2013 PU Plan and 2012 PU Award Agreement will enable us to obtain and retain employees who will contribute to our long term success by aligning the interests of our executives with the interests of our stockholders by providing compensation that is linked directly to increases in share value.

In January 2013, we issued 0.4 million performance units to our executive officers under the 2012 Plan with such material terms as set forth in the 2012 PU Award Agreement. In February 2013, we issued 0.2 million performance units to certain other employees under the 2013 PU Plan. The performance units are measured based on two performance periods from January 1, 2013 to December 31, 2013 and from January 1, 2014 to December 31, 2014. One half of the performance units are measured based on the first performance period, and the other half are measured based on the second performance period. The number of performance units that may be earned by a participant is determined at the end of each performance period based on the relative placement of Key’s total stockholder return for that period within the peer group, as follows:

Company Placement for the Performance Period	Percentile Ranking in Peer Group		Performance Units Earned as a Percentage of Target
First	100	%	200	%
Second	91	%	180	%
Third	82	%	160	%
Fourth	73	%	140	%
Fifth	64	%	120	%
Sixth	55	%	100	%
Seventh	45	%	75	%
Eighth	36	%	50	%
Ninth	27	%	25	%
Tenth	18	%	0	%
Eleventh	9	%	0	%
Twelfth	0	%	0	%

If any performance units vest for a given performance period, the award holder will be paid a cash amount equal to the vested percentage of the performance units multiplied by the closing stock price of our common stock on the last trading day of the performance period. We account for the performance units as a liability-type award as they are settled in cash. As of June 30, 2013, the fair value of outstanding performance units was $2.4 million, and is being accreted to compensation expense over the vesting terms of the awards. As of June 30, 2013, the unrecognized compensation cost related to our unvested performance units is estimated to be $1.6 million and is expected to be recognized over a weighted-average period of 1.6 years.

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NOTE 15. TRANSACTIONS WITH RELATED PARTIES

Employee Loans and Advances

From time to time, we have made certain retention loans and relocation loans to employees other than executive officers. The retention loans are forgiven over various time periods, so long as the employees continue their employment with us. The relocation loans are repaid upon the employees selling their prior residence. As of June 30, 2013 and December 31, 2012, we did not have any employee loans or advances outstanding.

Board of Director Relationships

A member of our board of directors is the Senior Vice President, General Counsel and Chief Administrative Officer of Anadarko Petroleum Corporation (“Anadarko”), which is one of our customers. Sales to Anadarko were approximately $7.6 million and $12.4 million for the three-month periods endedJune 30, 2013 and 2012, respectively, and $14.2 million and $23.8 million for the six months endedJune 30, 2013 and 2012, respectively. Receivables outstanding from Anadarko were approximately $4.2 million and $3.5 million as of June 30, 2013 and December 31, 2012, respectively. Transactions with Anadarko for our services are made on terms consistent with other customers.

A member of our board of directors serves on the United States Advisory Board of the Alexander Proudfoot practice of Management Consulting Group PLC (“Proudfoot”), which provided consulting services to us related to our general and administrative cost restructuring initiative. There were no payments made to Proudfoot during the three or six months ended June 30, 2013. Payments to Proudfoot were zero and $1.9 million for the three and six months ended June 30, 2012, respectively.

NOTE 16. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of June 30, 2013 and December 31, 2012.

Cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet date.

	June 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	12,955		12,955		12,955		12,955
Financial liabilities:
6.75% Senior Notes	$	675,000	$	663,188	$	675,000	$	680,510
8.375% Senior Notes	3,573		3,637		3,573		3,656
Credit Facility revolving loans	185,000		185,000		165,000		165,000

Notes receivable — Argentina operations sale. The fair value of these notes receivable is based upon the quoted market Treasury rates as of the twelve, eighteen and twenty-four month maturity dates indicated. The carrying values of these items approximate their fair values due to the maturity dates rapidly approaching, thus giving way to discount rates that are similar.

6.75% Senior Notes due 2021. The fair value of these notes are based upon the quoted market prices for those securities as of the dates indicated. The carrying value of these notes as of June 30, 2013 was $675.0 million, and the fair value was $663.2 million (98.3% of carrying value).

8.375% Senior Notes due 2014. The fair value of our 2014 Notes is based upon the quoted market prices for those securities as of the dates indicated. The carrying value of these notes as of June 30, 2013 was $3.6 million, and the fair value was $3.6 million (101.8% of carrying value).

Credit Facility Revolving Loans. Because of their variable interest rates, the fair values of the revolving loans borrowed under our 2012 Credit Facility approximate their carrying values. The carrying and fair values of these loans as of June 30, 2013 were $185.0 million.

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NOTE 17. SEGMENT INFORMATION

Our operating segments are U.S. and International. We also have a “Functional Support” segment associated with managing each of our reportable operating segments. Our domestic rig services, fluid management services, fishing and rental services, and coiled tubing services are aggregated within our U.S. reportable segment. Our international rig services business and our Canadian technology development group are aggregated within our International reportable segment. We evaluate the performance of our operating segments based on revenue and income measures. All inter-segment sales pricing is based on current market conditions. The following is a description of the segments:

U.S. Segment

Rig-Based Services

Our rig-based services include the completion of newly drilled wells, workover and recompletion of existing oil and natural gas wells, well maintenance, and the plugging and abandonment of wells at the end of their useful lives. We also provide specialty drilling services to oil and natural gas producers with certain of our larger rigs that are capable of providing conventional and horizontal drilling services. Our rigs encompass various sizes and capabilities, allowing us to service all types of wells with depths up to 20,000 feet. Many of our rigs are outfitted with our proprietary KeyView® technology, which captures and reports well site operating data and provides safety control systems. We believe that this technology allows our customers and our crews to better monitor well site operations, improves efficiency and safety, and adds value to the services that we offer.

The completion and recompletion services provided by our rigs prepare wells for production, whether newly drilled, or recently extended through a workover operation. The completion process may involve selectively perforating the well casing to access production zones, stimulating and testing these zones, and installing tubular and downhole equipment. We typically provide a well service rig and may also provide other equipment to assist in the completion process. Completion services vary by well and our work may take a few days to several weeks to perform, depending on the nature of the completion.

The workover services that we provide are designed to enhance the production of existing wells and generally are more complex and time consuming than normal maintenance services. Workover services can include deepening or extending wellbores into new formations by drilling horizontal or lateral wellbores, sealing off depleted production zones and accessing previously bypassed production zones, converting former production wells into injection wells for enhanced recovery operations and conducting major subsurface repairs due to equipment failures. Workover services may last from a few days to several weeks, depending on the complexity of the workover.

Maintenance services provided with our rig fleet are generally required throughout the life cycle of an oil or natural gas well. Examples of these maintenance services include routine mechanical repairs to the pumps, tubing and other equipment, removing debris and formation material from wellbores, and pulling rods and other downhole equipment from wellbores to identify and resolve production problems. Maintenance services are generally less complicated than completion and workover related services and require less time to perform.

Our rig fleet is also used in the process of permanently shutting-in oil or natural gas wells that are at the end of their productive lives. These plugging and abandonment services generally require auxiliary equipment in addition to a well servicing rig. The demand for plugging and abandonment services is not significantly impacted by the demand for oil and natural gas because well operators are required by state regulations to plug wells that are no longer productive.

Fluid Management Services

We provide transportation and well-site storage services for various fluids utilized in connection with drilling, completions, workover and maintenance activities. We also provide disposal services for fluids produced subsequent to well completion.  These fluids are removed from the well site and transported for disposal in saltwater disposal wells owned by us or a third party. In addition, we operate a fleet of hot oilers capable of pumping heated fluids used to clear soluble restrictions in a wellbore. Demand and pricing for these services generally correspond to demand for our well service rigs.

Coiled Tubing Services

Coiled tubing services involve the use of a continuous metal pipe spooled onto a large reel which is then deployed into oil and natural gas wells to perform various applications, such as wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations utilizing acid and chemical treatments. Coiled tubing is also used for a number of horizontal well applications such as milling temporary isolation plugs that separate frac zones, and various other pre- and post- hydraulic fracturing well preparation services.

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Fishing and Rental Services

We offer a full line of services and rental equipment designed for use in providing both onshore and offshore drilling and workover services. Fishing services involve recovering lost or stuck equipment in the wellbore utilizing a broad array of “fishing tools.” Our rental tool inventory consists of drill pipe, tubulars, handling tools (including our patented Hydra-Walk^® pipe-handling units and services), pressure-control equipment, pumps, power swivels, reversing units, foam air units, frac stack equipment used to support hydraulic fracturing operations and the associated flowback of frac fluids, proppants, oil and natural gas. We also provide well testing services.

Demand for our fishing and rental services is also closely related to capital spending by oil and natural gas producers, which is generally a function of oil and natural gas prices.

International Segment

Our International segment includes operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada. Also, we operated in Argentina prior to the sale of that business in the third quarter of 2012. We are reporting the results of our former Argentina business as discontinued operations for all periods presented. We provide rig-based services such as the maintenance, workover, recompletion of existing oil wells, completion of newly-drilled wells, and plugging and abandonment of wells at the end of their useful lives in each of our international markets.

In addition, in Mexico we provide drilling, coiled tubing, wireline, project management and consulting services. Our work in Mexico also requires us to provide third party services that vary in scope by project.

In the Middle East, we operate in the Kingdom of Bahrain and Oman. Our business in Bahrain is currently conducted through a joint venture in which we have a controlling interest.

Our Russian operations provide drilling, workover, and reservoir engineering services. On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream, a limited liability company incorporated in the Russian Federation, for $14.6 million. Key now owns 100% of Geostream . See “Note 3. Acquisition of Noncontrolling Interest in Geostream” for further discussion.

Our technology development and control systems business based in Canada is focused on the development of hardware and software related to oilfield service equipment controls, data acquisition and digital information flow.

Functional Support Segment

Our Functional Support segment includes unallocated overhead costs associated with administrative support for our U.S. and International reporting segments.

24

The following tables set forth our unaudited segment information as of and for the three and six months ended June 30, 2013 and 2012. (in thousands):

As of and for the three months ended June 30, 2013
	U.S.			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	361,698		$	49,692		$	—		$	—		$	411,390
Intersegment revenues	(139		)	2,676			23			(2,560		)	—
Depreciation and amortization	47,484			7,463			3,261			—			58,208
Other operating expenses	259,121			53,235			32,482			—			344,838
Operating income (loss)	55,093			(11,006		)	(35,743		)	—			8,344
Interest expense, net of amounts capitalized	—			15			13,969			—			13,984
Income (loss) from continuing operations before tax	55,210			(11,762		)	(49,518		)	—			(6,070		)
Long-lived assets(1)	1,671,666			333,096			292,818			(185,010		)	2,112,570
Total assets	2,654,754			556,325			23,035			(501,677		)	2,732,437
Capital expenditures, excluding acquisitions	26,659			2,196			6,578			—			35,433

As of and for the three months ended June 30, 2012
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	431,646	$	84,351	$	—		$	—		$	515,997
Intersegment revenues	—		1,195		—			(1,195		)	—
Depreciation and amortization	44,838		4,526		3,088			—			52,452
Other operating expenses	304,311		63,709		34,057			—			402,077
Operating income (loss)	82,497		16,116		(37,145		)	—			61,468
Interest expense, net of amounts capitalized	4		1		13,725			—			13,730
Income (loss) from continuing operations before tax	82,530		17,073		(50,485		)	—			49,118
Long-lived assets(1)	1,907,653		308,497		301,454			(344,309		)	2,173,295
Total assets	2,591,329		502,735		408,233			(711,977		)	2,790,320
Capital expenditures, excluding acquisitions	85,406		39,321		15,163			—			139,890

25

As of and for the six months ended June 30, 2013
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	707,770	$	132,069	$	—		$	—		$	839,839
Intersegment revenues	8,462		4,195		147			(12,804		)	—
Depreciation and amortization	92,274		13,963		6,164			—			112,401
Other operating expenses	522,128		117,238		67,899			—			707,265
Operating income (loss)	93,368		868		(74,063		)	—			20,173
Interest expense, net of amounts capitalized	1		64		27,723			—			27,788
Income (loss) from continuing operations before tax	93,419		1,294		(101,535		)	—			(6,822		)
Long-lived assets(1)	1,671,666		333,096		292,818			(185,010		)	2,112,570
Total assets	2,654,754		556,325		23,035			(501,677		)	2,732,437
Capital expenditures, excluding acquisitions	49,969		13,163		9,445			—			72,577

As of and for the six months ended June 30, 2012
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	856,619	$	146,129	$	—		$	—		$	1,002,748
Intersegment revenues	—		2,152		15			(2,167		)	—
Depreciation and amortization	89,189		8,473		5,979			—			103,641
Other operating expenses	593,475		111,172		69,845			—			774,492
Operating income (loss)	173,955		26,484		(75,824		)	—			124,615
Interest expense, net of amounts capitalized	12		14		25,586			—			25,612
Income (loss) from continuing operations before tax	174,082		28,300		(100,970		)	—			101,412
Long-lived assets(1)	1,907,653		308,497		301,454			(344,309		)	2,173,295
Total assets	2,591,329		502,735		408,233			(711,977		)	2,790,320
Capital expenditures, excluding acquisitions	164,816		124,777		19,735			—			309,328

(1) Long lived assets include: fixed assets, goodwill, intangibles and other assets.

(2) Functional Support is geographically located in the United States.

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NOTE 18. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Our 2021 Notes are guaranteed by our domestic subsidiaries, all of which are wholly owned. The guarantees are joint and several, full, complete and unconditional. There are no restrictions on the ability of subsidiary guarantors to transfer funds to the parent company.

As a result of these guarantee arrangements, we are required to present the following condensed consolidating financial information pursuant to SEC Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”

CONDENSED CONSOLIDATING BALANCE SHEETS
	June 30, 2013
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands) (unaudited)
Assets:
Current assets	$	51,099	$	510,280	$	58,488		$	—		$	619,867
Property and equipment, net	—		1,288,438		106,155			—			1,394,593
Goodwill	—		597,458		27,400			—			624,858
Deferred financing costs, net	15,301		—		—			—			15,301
Intercompany notes and accounts receivable and investment in subsidiaries	3,463,047		1,203,469		(4,502		)	(4,662,014		)	—
Other assets	4,082		31,664		42,072			—			77,818
TOTAL ASSETS	$	3,533,529	$	3,631,309	$	229,613		$	(4,662,014	)	$	2,732,437
Liabilities and equity:
Current liabilities	$	23,013	$	215,451	$	26,553		$	—		$	265,017
Long-term debt and capital leases, less current portion	867,832		—		—			—			867,832
Intercompany notes and accounts payable	1,108,780		2,640,108		52,601			(3,801,489		)	—
Deferred tax liabilities	262,722		6,781		(478		)	—			269,025
Other long-term liabilities	1,548		59,216		147			—			60,911
Equity	1,269,634		709,753		150,790			(860,525		)	1,269,652
TOTAL LIABILITIES AND EQUITY	$	3,533,529	$	3,631,309	$	229,613		$	(4,662,014	)	$	2,732,437

27

CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2012
	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	66,435		$	469,049	$	54,310		$	—		$	589,794
Property and equipment, net	—			1,329,379		107,295			—			1,436,674
Goodwill	—			597,458		29,023			—			626,481
Deferred financing costs, net	16,628			—		—			—			16,628
Intercompany notes and accounts receivable and investment in subsidiaries	3,298,679			1,108,231		(20,371		)	(4,386,539		)	—
Other assets	8,068			39,696		44,247			—			92,011
TOTAL ASSETS	$	3,389,810	—	$	3,543,813	$	214,504		$	(4,386,539	)	$	2,761,588
Liabilities and equity:
Current liabilities	$	46,632		$	226,773	$	31,691		$	—		$	305,096
Long-term debt and capital leases, less current portion	848,110			—		—			—			848,110
Intercompany notes and accounts payable	947,700			2,590,398		14,138			(3,552,236		)	—
Deferred tax liabilities	258,528			6,781		(746		)	(5,110		)	259,453
Other long-term liabilities	1,528			60,068		1			—			61,597
Equity	1,287,312			659,793		169,420			(829,193		)	1,287,332
TOTAL LIABILITIES AND EQUITY	$	3,389,810		$	3,543,813	$	214,504		$	(4,386,539	)	$	2,761,588

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	23		$	389,847		$	44,807		$	(23,287	)	$	411,390
Direct operating expense	—			273,188			32,637			(18,723		)	287,102
Depreciation and amortization expense	—			55,533			2,675			—			58,208
General and administrative expense	262			52,543			9,449			(4,518		)	57,736
Operating (loss) income	(239		)	8,583			46			(46		)	8,344
Interest expense, net of amounts capitalized	14,124			(155		)	15			—			13,984
Other expense (income), net	(911		)	(77		)	701			717			430
Income (loss) from continuing operations before taxes	(13,452		)	8,815			(670		)	(763		)	(6,070		)
Income tax benefit (expense)	(3,631		)	6,154			(225		)	—			2,298
Income (loss) from continuing operations	(17,083		)	14,969			(895		)	(763		)	(3,772		)
Discontinued operations	—			—			—			—			—
Net income (loss)	(17,083		)	14,969			(895		)	(763		)	(3,772		)
Income attributable to noncontrolling interest	—			—			356			—			356
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(17,083	)	$	14,969		$	(1,251	)	$	(763	)	$	(4,128	)

28

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	493,046		$	41,609		$	(18,658	)	$	515,997
Direct operating expense	—			331,139			28,908			(16,051		)	343,996
Depreciation and amortization expense	—			50,354			2,098			—			52,452
General and administrative expense	303			53,286			7,080			(2,588		)	58,081
Operating (loss) income	(303		)	58,267			3,523			(19		)	61,468
Interest expense, net of amounts capitalized	14,112			(385		)	3			—			13,730
Other expense (income), net	(895		)	75			(651		)	91			(1,380		)
Income (loss) from continuing operations before taxes	(13,520		)	58,577			4,171			(110		)	49,118
Income tax expense	(14,984		)	(1,376		)	(1,059		)	—			(17,419		)
Income (loss) from continuing operations	(28,504		)	57,201			3,112			(110		)	31,699
Discontinued operations	—			—			(2,454		)	—			(2,454		)
Net income (loss)	(28,504		)	57,201			658			(110		)	29,245
Income attributable to noncontrolling interest	—			—			204			—			204
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(28,504	)	$	57,201		$	454		$	(110	)	$	29,041

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	147		$	795,231		$	88,297		$	(43,836	)	$	839,839
Direct operating expense	—			559,230			63,120			(36,066		)	586,284
Depreciation and amortization expense	—			107,590			4,811			—			112,401
General and administrative expense	516			110,364			18,301			(8,200		)	120,981
Operating (loss) income	(369		)	18,047			2,065			430			20,173
Interest expense, net of amounts capitalized	28,015			(291		)	64			—			27,788
Other expense (income), net	(1,809		)	(1,246		)	738			1,524			(793		)
Income (loss) from continuing operations before taxes	(26,575		)	19,584			1,263			(1,094		)	(6,822		)
Income tax benefit (expense)	(2,383		)	5,271			(24		)	—			2,864
Income (loss) from continuing operations	(28,958		)	24,855			1,239			(1,094		)	(3,958		)
Discontinued operations	—			—			—			—			—
Net income (loss)	(28,958		)	24,855			1,239			(1,094		)	(3,958		)
Income attributable to noncontrolling interest	—			—			444			—			444
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(28,958	)	$	24,855		$	795		$	(1,094	)	$	(4,402	)

29

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	15		$	958,316		$	74,595		$	(30,178	)	$	1,002,748
Direct operating expense	—			626,776			53,691			(24,974		)	655,493
Depreciation and amortization expense	—			100,021			3,620			—			103,641
General and administrative expense	573			111,006			12,603			(5,183		)	118,999
Operating (loss) income	(558		)	120,513			4,681			(21		)	124,615
Interest expense, net of amounts capitalized	26,259			(658		)	11			—			25,612
Other expense (income), net	(1,506		)	657			(1,728		)	168			(2,409		)
Income (loss) from continuing operations before taxes	(25,311		)	120,514			6,398			(189		)	101,412
Income tax expense	(32,946		)	(1,581		)	(1,705		)	—			(36,232		)
Income (loss) from continuing operations	(58,257		)	118,933			4,693			(189		)	65,180
Discontinued operations	—			—			(33,359		)	—			(33,359		)
Net income (loss)	(58,257		)	118,933			(28,666		)	(189		)	31,821
Loss attributable to noncontrolling interest	—			—			(410		)	—			(410		)
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(58,257	)	$	118,933		$	(28,256	)	$	(189	)	$	32,231

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CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	45,284		$	1,397		$	—		$	46,681
Cash flows from investing activities:
Capital expenditures	—			(69,413		)	(3,164		)	—			(72,577		)
Acquisition of the 50% noncontrolling interest in Geostream	—			(14,600		)	—			—			(14,600		)
Intercompany notes and accounts	—			36,539			—			(36,539		)	—
Other investing activities, net				3,881			—			—			3,881
Net cash used in investing activities	—			(43,593		)	(3,164		)	(36,539		)	(83,296		)
Cash flows from financing activities:
Repayment of capital lease obligations	—			(379		)	—			—			(379		)
Proceeds from borrowings on revolving credit facility	155,000			—			—			—			155,000
Repayments on revolving credit facility	(135,000		)	—			—			—			(135,000		)
Payment of deferred financing costs	(69		)	—			—			—			(69		)
Repurchases of common stock	(3,134		)	—			—			—			(3,134		)
Intercompany notes and accounts	(36,539		)	—			—			36,539			—
Other financing activities, net	(1,501		)	—			—			—			(1,501		)
Net cash provided by (used in) financing activities	(21,243		)	(379		)	—			36,539			14,917
Effect of changes in exchange rates on cash	—			—			484			—			484
Net increase (decrease) in cash and cash equivalents	(21,243		)	1,312			(1,283		)	—			(21,214		)
Cash and cash equivalents at beginning of period	39,617			1,601			4,731			—			45,949
Cash and cash equivalents at end of period	$	18,374		$	2,913		$	3,448		$	—		$	24,735

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	Six Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	(24,658	)	$	210,219		$	6,291		$	—		$	191,852
Cash flows from investing activities:
Capital expenditures	—			(302,754		)	(6,574		)	—			(309,328		)
Intercompany notes and accounts	676			67,769			—			(68,445		)	—
Other investing activities, net	(676		)	9,225			—			—			8,549
Net cash used in investing activities	—			(225,760		)	(6,574		)	(68,445		)	(300,779		)
Cash flows from financing activities:
Proceeds from long-term debt	205,000						—			—			205,000
Repayment of capital lease obligations	—			(1,007		)	—			—			(1,007		)
Proceeds from borrowings on revolving credit facility	195,000			—			—			—			195,000
Repayments on revolving credit facility	(300,000		)	—			—			—			(300,000		)
Payment of deferred financing costs	(4,534		)	—			—			—			(4,534		)
Repurchases of common stock	(7,417		)	—			—			—			(7,417		)
Intercompany notes and accounts	(67,769		)	(676		)	—			68,445			—
Other financing activities, net	4,859			10,914			1,687			—			17,460
Net cash provided by financing activities	25,139			9,231			1,687			68,445			104,502
Effect of changes in exchange rates on cash	—			—			(2,738		)	—			(2,738		)
Net increase (decrease) in cash and cash equivalents	481			(6,310		)	(1,334		)	—			(7,163		)
Cash and cash equivalents at beginning of period	21,673			7,985			5,785			—			35,443
Cash and cash equivalents at end of period	$	22,154		$	1,675		$	4,451		$	—		$	28,280

32

NOTE 19. VARIABLE INTEREST ENTITIES

On March 7, 2010, we entered into an agreement with AlMansoori Petroleum Services LLC (“AlMansoori”) to form the joint venture AlMansoori Key Energy Services LLC, a joint venture under the laws of Abu Dhabi, UAE. The purpose of the joint venture is to engage in conventional workover and drilling services, coiled tubing services, fishing and rental services, rig monitoring services, pipe handling services and fluids, waste treatment and handling services. AlMansoori holds a 51% interest in the joint venture while we hold a 49% interest. However, we hold three of the five board of directors seats and a controlling financial interest. Future capital contributions to the joint venture will be made on equal terms and in equal amounts, and any future share capital increases will be issued in proportion to the initial share capital percentages but paid for by AlMansoori and Key in equal amounts. Also, we share the profits and losses of the joint venture on equal terms and in equal amounts with AlMansoori. The joint venture does not have sufficient resources to carry on its activities without our financial support; accordingly, we have determined it to be a variable interest entity of which we are the primary beneficiary. We consolidate the entity in our financial statements. We have guaranteed the performance of the joint venture under its sole services contract valued at $2.0 million. Creditors of the joint venture have no recourse to us other than pursuant to this guarantee.

For the three and six months ended June 30, 2013, we recognized $4.6 million and $8.6 million of revenue, respectively, and $0.8 million and $1.7 million of net income, respectively, associated with this joint venture. For the three and six months ended June 30, 2012, we recognized $4.0 million and $7.3 million of revenue, respectively, and $0.8 million and $1.0 million of net income, respectively, associated with this joint venture. At June 30, 2013, there were approximately $16.6 million of assets and $13.4 million of liabilities in the joint venture. At December 31, 2012, there were approximately $16.2 million of assets and $14.7 million of liabilities in the joint venture. There are no restrictions on the use of assets and liabilities associated with the joint venture.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Key Energy Services, Inc., its wholly owned subsidiaries and its controlled subsidiaries (collectively, “Key,” the “Company,” “we,” “us,” “its,” and “our”) provide a full range of well services to major oil companies, foreign national oil companies and independent oil and natural gas production companies. Our services include rig-based and coiled tubing-based well maintenance and workover services, well completion and recompletion services, fluid management services, fishing and rental services, and other ancillary oilfield services. Additionally, certain rigs are capable of specialty drilling applications. We operate in most major oil and natural gas producing regions of the continental United States and have operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada.

The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes as of and for the three and six months ended June 30, 2013 and 2012, included elsewhere herein, and the audited consolidated financial statements and notes thereto included in our 2012 Form 10-K.

We operate in two business segments; U.S. and International. We also have a “Functional Support” segment associated with managing our U.S. and International business segments. See “Note 17. Segment Information” in “Item 1. Financial Statements” of Part I of this report for a summary of our business segments.

RECENT DEVELOPMENT

On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream, a limited liability company incorporated in the Russian Federation, for $14.6 million. Key now owns 100% of Geostream. See “Note 3. Acquisition of Noncontrolling Interest in Geostream” in Item 1. Financial Statements” of Part I of this report for further discussion.

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PERFORMANCE MEASURES

The Baker Hughes U.S. rig count data, which is publicly available on a weekly basis, is often used as an indicator of overall Exploration and Production (E&P) company spending and broader oilfield activity. In assessing overall activity in the U.S. onshore oilfield service industry in which we operate, we believe that the Baker Hughes U.S. land drilling rig count is the best available barometer of E&P companies' capital spending and resulting activity levels. Historically, our activity levels have been highly correlated to U.S. onshore capital spending by our E&P company customers as a group.

	WTI Cushing Oil (1)		NYMEX Henry Hub Natural Gas (1)		Average Baker Hughes U.S. Land Drilling Rigs (2)
2013:
First Quarter	$	94.33	$	3.49	1,706
Second Quarter	$	94.05	$	4.02	1,710
2012:
First Quarter	$	102.98	$	2.50	1,947
Second Quarter	$	93.06	$	2.35	1,924
Third Quarter	$	92.17	$	2.89	1,855
Fourth Quarter	$	88.01	$	3.40	1,759

(1) Represents the average of the monthly average prices for each of the periods presented. Source: EIA and Bloomberg

(2) Source: www.bakerhughes.com

Internally, we measure activity levels for our well servicing operations primarily through our rig and trucking hours. Generally, as capital spending by E&P companies increases, demand for our services also rises, resulting in increased rig and trucking services and more hours worked. Conversely, when activity levels decline due to lower spending by E&P companies, we generally provide fewer rig and trucking services, which results in lower hours worked.

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In the U.S., our rig activity occurs primarily on weekdays during daylight hours. Accordingly, we track U.S. rig activity on a “per U.S. working day” basis. Key's U.S. working days per quarter, which exclude national holidays, are indicated in the table below. Our international rig activity and domestic trucking activity tend to occur on a 24/7 basis. Accordingly, we track our international rig activity and our domestic trucking activity on a “per calendar day” basis. The following table presents our quarterly rig and trucking hours from 2012 through the second quarter of 2013:

	Rig Hours			Trucking Hours	Key’s U.S. Working Days (3)
2013:	U.S.	International Continuing Operations (1)	Total Continuing Operations (2)
First Quarter	337,714	114,103	451,817	580,862	62
Second Quarter	365,956	65,280	431,236	559,584	64
Total 2013:	703,670	179,383	883,053	1,140,446	126
2012:
First Quarter	435,280	84,469	519,749	722,718	64
Second Quarter	428,864	104,656	533,520	685,587	63
Third Quarter	412,998	103,448	516,446	607,480	63
Fourth Quarter	357,628	113,246	470,874	594,770	62
Total 2012:	1,634,770	405,819	2,040,589	2,610,555	252

(1) International continuing operations rig hours exclude rig hours generated in Argentina, as our Argentina operations were sold in the third quarter of 2012 and are reported as discontinued operations. Argentina rig hours were 54,625 and 55,972 for the first and second quarters of 2012, respectively.

(2)    Total continuing operations rig hours include U.S. rig hours and international continuing operations rig hours

(3)    Key's U.S. working days are the number of weekdays during the quarter minus national holidays.

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MARKET CONDITIONS AND OUTLOOK

Market Conditions — Quarter Ended June 30, 2013

Our core businesses depend on our customers' willingness to make expenditures to produce, develop and explore for oil and natural gas. Industry conditions are influenced by numerous factors, such as the supply of and demand for oil and natural gas, domestic and worldwide economic conditions, and political instability in oil producing countries.

In our U.S. segment, overall increased activity levels for our services in the second quarter were essentially consistent with typical seasonal patterns due to longer days and better weather conditions in the spring and summer months. The activity increase drove a 4.5% increase in U.S. Segment revenues. Second quarter U.S. Segment operating income increased considerably more than revenues, due primarily to improvements in operating and cost efficiencies in Rig Services, Coiled Tubing Services and Fluids Management Services.

Early in the second quarter, we initiated a significant restructuring of our Fluid Management Services business, which included reducing under-utilized assets and personnel as well as consolidating the management of this business under the Rig Services management team. These actions enabled the business to generate a modest operating profit in the second quarter compared to an operating loss in the first quarter. Ongoing efforts remain underway to further improve the profitability of this business line.

Our Rig Services business benefited from higher asset utilization and improved operating efficiencies. Our Coiled Tubing Service business benefited from increased customer demand, higher utilization of coiled tubing assets on a more consistent basis, particularly with our larger units, and improved operating efficiencies during the second quarter.    

Internationally, our activity and revenues declined in the second quarter of 2013 compared to the first quarter as our principal customer in Mexico significantly reduced its activity in the North Region of the country, which also negatively impacted our profitability. We have been actively mobilizing our idle rigs to the South Region of Mexico and other countries in which we believe the assets can be more fully utilized.

Additionally, during the quarter we initiated rig services operations in Ecuador, which we expect to further grow activity.

Market Outlook

We believe that macroeconomic fundamentals remain supportive of domestic and international oil and natural gas related drilling, workover and production maintenance activity. Thus far in 2013, Key's U.S. activity has essentially followed seasonal trends, which typically generate 3% to 5% activity improvement in the second quarter compared to first quarter levels. We currently expect third quarter U.S. market activity levels to be roughly flat compared to the second quarter followed by a typical seasonal activity decline in the fourth quarter.

In Mexico, we expect our activity in the North Region to remain approximately flat until late 2013 or possibly early 2014. Meanwhile, we believe our activity in the South Region of Mexico, Colombia and Ecuador will grow moderately through year end 2013 as customer demand increases and as idle rigs from the North Region of Mexico mobilize to these markets.

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RESULTS OF OPERATIONS

The following table shows our consolidated results of operations for the three and six months ended June 30, 2013 and 2012, respectively (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
REVENUES	$	411,390		$	515,997		$	839,839		$	1,002,748
COSTS AND EXPENSES:
Direct operating expenses	287,102			343,996			586,284			655,493
Depreciation and amortization expense	58,208			52,452			112,401			103,641
General and administrative expenses	57,736			58,081			120,981			118,999
Operating income	8,344			61,468			20,173			124,615
Interest expense, net of amounts capitalized	13,984			13,730			27,788			25,612
Other income (loss), net	430			(1,380		)	(793		)	(2,409		)
Income (loss) from continuing operations before tax	(6,070		)	49,118			(6,822		)	101,412
Income tax benefit (expense)	2,298			(17,419		)	2,864			(36,232		)
Income (loss) from continuing operations	(3,772		)	31,699			(3,958		)	65,180
Loss from discontinued operations, net of tax benefit of $-, $1,501, $- and $17,855, respectively	—			(2,454		)	—			(33,359		)
Net income (loss)	(3,772		)	29,245			(3,958		)	31,821
Income (loss) attributable to noncontrolling interest	356			204			444			(410		)
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(4,128	)	$	29,041		$	(4,402	)	$	32,231

Consolidated Results of Operations — Three Months Ended June 30, 2013 and 2012

Revenues

Our revenues for the three months ended June 30, 2013 decreased $104.6 million, or 20.3%, to $411.4 million from $516.0 million for the three months ended June 30, 2012, mostly due to lower demand for our rig-based services in oil markets and overall weaker economic conditions affecting both our domestic and international operations. See “Segment Operating Results — Three Months Ended June 30, 2013 and 2012” below for a more detailed discussion of the change in our revenues.

Direct Operating Expenses

Our direct operating expenses decreased $56.9 million, to $287.1 million (69.8% of revenues), for the three months ended June 30, 2013, compared to $344.0 million (66.7% of revenues) for the three months ended June 30, 2012. The decrease was a direct result of activity decreases in our business and better operating efficiencies in our Rig and Coiled Tubing Services businesses, partly offset by the impact of higher employment taxes and charges of $4.1 million primarily associated with severance and $2.3 million of costs primarily associated with rig mobilizations from the North Region of Mexico to the South Region of Mexico and to other countries, including the U.S. and $1.9 million of lease cancellation fees.

Depreciation and Amortization Expense

Depreciation and amortization expense increased $5.8 million, or 11.0%, to $58.2 million during the second quarter of 2013, compared to $52.5 million for the second quarter of 2012. The increase is primarily attributable to increased capital expenditures during 2012.

General and Administrative Expenses

General and administrative expenses decreased $0.3 million, to $57.7 million (14.0% of revenues), for the three months ended June 30, 2013, compared to $58.1 million (11.3% of revenues) for the three months ended June 30, 2012. The decrease is primarily due to lower third party consulting fees, partly offset by a charge of $2.2 million primarily associated with severance.

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Interest Expense, Net of Amounts Capitalized

Interest expense increased $0.3 million, or 1.8%, to $14.0 million for the three months ended June 30, 2013, compared to $13.7 million for the same period in 2012. The increase is primarily related to higher capitalized cost for the three months June 30, 2012.

Other (Income) loss, Net

During the quarter ended June 30, 2013, we recognized other loss, net, of $0.4 million, compared to other income, net, of $1.4 million for the same period ended year ended June 30, 2012. Our foreign exchange (gain) loss relates to activity in U.S. dollar-denominated transactions in our foreign locations and fluctuations in the U.S. dollar.

The following table summarizes the components of other (income) loss, net for the periods indicated:

	Three Months Ended June 30,
	2013			2012
	(in thousands)
Interest income	$	(84	)	$	(7	)
Foreign exchange (gain) loss	1,398			(766		)
Other income, net	(884		)	(607		)
Total	$	430		$	(1,380	)

Income Tax Expense

We recorded income tax benefit of $2.3 million on pre-tax loss from continuing operations of $6.1 million in the second quarter of 2013, compared to income tax expense of $17.4 million on pre-tax income from continuing operations of $49.1 million in the second quarter of 2012. Our effective tax rate on continuing operations was 37.9% for the three months ended June 30, 2013, compared to 35.5% for the three months ended June 30, 2012. Our effective tax rates for such periods differ from the U.S. statutory rate of 35% due to a number of factors, including the mix of profit and loss between various domestic and international taxing jurisdictions and the impact of permanent items that affect book income but do not affect taxable income.

Discontinued Operations

Our discontinued operations in 2012 related to the sale of our Argentina business, which was completed during the third quarter of 2012. Our net loss from discontinued operations for the three months ended June 30, 2013 was zero compared to a net loss from discontinued operations of $2.5 million for the three months ended June 30, 2012.

Noncontrolling Interest

For the three months ended June 30, 2013, we allocated $0.4 million associated with the income incurred by our joint ventures to the noncontrolling interest holders of these ventures compared to income of $0.2 million for the three months ended June 30, 2012. The increase is due mainly to higher profitability in our Middle East joint venture.

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Segment Operating Results — Three Months Ended June 30, 2013 and 2012

The following table shows operating results for each of our segments for the three months ended June 30, 2013 and 2012 (in thousands):

For the three months ended June 30, 2013
	U.S.		International			Functional Support			Total
Revenues from external customers	$	361,698	$	49,692		$	—		$	411,390
Operating expenses	306,605		60,698			35,743			403,046
Operating income (loss)	$	55,093	$	(11,006	)	$	(35,743	)	$	8,344

For the three months ended June 30, 2012
	U.S.		International		Functional Support			Total
Revenues from external customers	$	431,646	$	84,351	$	—		$	515,997
Operating expenses	349,149		68,235		37,145			454,529
Operating income (loss)	$	82,497	$	16,116	$	(37,145	)	$	61,468

U.S.

Revenues for our U.S. segment decreased $69.9 million, or 16.2%, to $361.7 million for the three months ended June 30, 2013, compared to $431.6 million for the three months ended June 30, 2012. The decrease for this segment was due to less customer spending and lower activity in natural gas markets as well as increased competition.

Operating expenses for our U.S. segment were $306.6 million during the three months ended June 30, 2013, which represented a decrease of $42.5 million, or 12.2%, compared to $349.1 million for the same period in 2012. The decrease was directly attributable to lower activity in oil markets during the period and better operating efficiencies in Key's Rig Service and Coiled Tubing Services, partly offset by the impact of higher employment taxes and a charge of $1.6 million related to lease cancellation fees.

International

Revenues for our International segment decreased $34.7 million, or 41.1%, to $49.7 million for the three months ended June 30, 2013, compared to $84.4 million for the three months ended June 30, 2012. The decrease was primarily attributable to lower customer activity in Mexico.

Operating expenses for our International segment decreased $7.5 million, or 11.0%, to $60.7 million for the three months ended June 30, 2013, compared to $68.2 million for the three months ended June 30, 2012. These expenses decreased as a direct result of lower customer activity in Mexico and were partly offset by charges of $4.8 million primarily associated with severance and $2.1 million of costs associated with rig mobilizations from the North Region of Mexico to the South Region of Mexico and to other countries, including the U.S..

Functional Support

Operating expenses for Functional Support, which represent expenses associated with managing our U.S. and International reporting segments, decreased $1.4 million, or 3.8%, to $35.7 million (8.7% of consolidated revenues) for the three months ended June 30, 2013 compared to $37.1 million (7.2% of consolidated revenues) for the same period in 2012. The decreased is primarily due to lower third party consulting fees, partly offset by $0.7 million of corporate reorganization costs.

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Consolidated Results of Operations — Six Months EndedJune 30, 2013 and 2012

Revenues

Our revenues for the six months endedJune 30, 2013 decreased $162.9 million, or 16.2%, to $839.8 million from $1,002.7 millionfor the six months endedJune 30, 2012, mostly due to lower demand for our rig-based services in oil markets and overall weaker economic conditions affecting both our domestic and international operations. See “Segment Operating Results — Six Months EndedJune 30, 2013 and 2012” below for a more detailed discussion of the change in our revenues.

Direct Operating Expenses

Our direct operating expenses decreased $69.2 million, to $586.3 million (69.8% of revenues), for the six months endedJune 30, 2013, compared to $655.5 million (65.4% of revenues) for the six months endedJune 30, 2012. The decrease was a direct result of activity decreases in our business and better operating efficiencies in our Rig Service and Coiled Tubing Services, partially offset by the impact of higher employment taxes and charges of $4.1 million primarily associated with severance and $2.3 million of costs primarily associated with rig mobilizations from the North Region of Mexico to the South Region of Mexico and to other countries, including the U.S. and $1.9 million of lease cancellation fees.

Depreciation and Amortization Expense

Depreciation and amortization expense increased $8.8 million, or 8.5%, to $112.4 million during the six months endedJune 30, 2013, compared to $103.6 millionfor the six months endedJune 30, 2012. The increase is primarily attributable to increased capital expenditures during 2012.

General and Administrative Expenses

General and administrative expenses increased $2.0 million, to $121.0 million (14.4% of revenues), for the six months endedJune 30, 2013, compared to $119.0 million (11.9% of revenues) for the six months endedJune 30, 2012. The increase is primarily related to a $2.2 million charge associated with the retirement of an executive recorded during first quarter 2013 and $2.2 million of expenses primarily associated with severance recorded during second quarter 2013, partly offset by lower third party consulting fees.

Interest Expense, Net of Amounts Capitalized

Interest expense increased $2.2 million, or 8.5%, to $27.8 millionfor the six months endedJune 30, 2013, compared to $25.6 million for the same period in 2012. Interest expense for the six months endedJune 30, 2013 increased due to the issuance of the additional $200 million aggregate principal amount of 2021 Notes during March 2012.

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Other Income, Net

During the six months ended June 30, 2013, we recognized other income, net, of $0.8 million, compared to other income, net, of $2.4 million for the same period ended June 30, 2012. Our foreign exchange (gain) loss relates to activity in U.S. dollar-denominated transactions in our foreign locations and fluctuations in the U.S. dollar.

The following table summarizes the components of other income, net for the periods indicated:

	Six Months Ended June 30,
	2013			2012
	(in thousands)
Interest income	$	(95	)	$	(14	)
Foreign exchange (gain) loss	473			(1,705		)
Other income, net	(1,171		)	(690		)
Total	$	(793	)	$	(2,409	)

Income Tax Expense

We recorded income tax benefit of $2.9 million on a pre-tax loss from continuing operations of $6.8 millionfor the six months endedJune 30, 2013, compared to income tax expense of $36.2 million on pre-tax income from continuing operations of $101.4 million for the same period in 2012. Our effective tax rate on continuing operations was 42.0%for the six months endedJune 30, 2013, compared to 35.7%for the six months endedJune 30, 2012. Our effective tax rates for such periods differ from the U.S. statutory rate of 35% due to a number of factors, including the mix of profit and loss between various domestic and international taxing jurisdictions and the impact of permanent items that affect book income but do not affect taxable income.

Discontinued Operations

Our discontinued operations in 2012 related to the sale of our Argentina business, which was completed during the third quarter of 2012. Our net loss from discontinued operations for the six months endedJune 30, 2013, was zero compared to a net loss from discontinued operations of $33.4 millionfor the six months endedJune 30, 2012.

Noncontrolling Interest

For the six months endedJune 30, 2013, we allocated $0.4 million associated with the income incurred by our joint ventures to the noncontrolling interest holders of these ventures compared to a loss of $0.4 millionfor the six months endedJune 30, 2012. The increase is due mainly to higher profitability in our Middle East joint venture.

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Segment Operating Results — Six Months EndedJune 30, 2013 and 2012

The following table shows operating results for each of our segments for the six months endedJune 30, 2013 and 2012 (in thousands):

For the six months ended June 30, 2013
	U.S.		International		Functional Support			Total
Revenues from external customers	$	707,770	$	132,069	$	—		$	839,839
Operating expenses	614,402		131,201		74,063			819,666
Operating income (loss)	93,368		868		(74,063		)	20,173

For the six months ended June 30, 2012
	U.S.		International		Functional Support			Total
Revenues from external customers	$	856,619	$	146,129	$	—		$	1,002,748
Operating expenses	682,664		119,645		75,824			878,133
Operating income (loss)	173,955		26,484		(75,824		)	124,615

U.S.

Revenues for our U.S. segment decreased $148.8 million, or 17.4%, to $707.8 millionfor the six months endedJune 30, 2013, compared to $856.6 millionfor the six months endedJune 30, 2012. The decrease for this segment was due to less customer spending, adverse weather conditions and lower activity in natural gas markets as well as increased competition.

Operating expenses for our U.S. segment were $614.4 millionfor the six months endedJune 30, 2013, which represented a decrease of $68.3 million, or 10.0%, compared to $682.7 million for the same period in 2012. The decrease was directly attributable to lower activity in oil markets during the period and better operating efficiencies in Key's Rig Service and Coiled Tubing Services, partially offset by labor cost inefficiencies due to weather related work delays and the impact of higher employment taxes and a charge of $1.6 million related to lease cancellation fees.

International

Revenues for our International segment decreased $14.1 million, or 9.6%, to $132.1 millionfor the six months endedJune 30, 2013, compared to $146.1 millionfor the six months endedJune 30, 2012. The decrease was primarily attributable to lower customer activity in Mexico.

Operating expenses for our International segment increased $11.6 million, or 9.7%, to $131.2 millionfor the six months endedJune 30, 2013, compared to $119.6 millionfor the six months endedJune 30, 2012. The increase is primarily related to charges of $4.8 million primarily associated with severance and $2.1 million of costs associated with rig mobilizations from the North Region of Mexico to the South Region of Mexico and to other countries, including the U.S.

Functional Support

Operating expenses for Functional Support, which represent expenses associated with managing our U.S. and International reporting segments, decreased $1.8 million, or 2.3%, to $74.1 million (8.8% of consolidated revenues) for the six months endedJune 30, 2013 compared to $75.8 million (7.6% of consolidated revenues) for the same period in 2012. The decrease is primarily due to lower third party consulting fees, partly offset by $0.7 million of corporate reorganization costs recorded during second quarter 2013.

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LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition and Liquidity

As of June 30, 2013, we had cash and cash equivalents of $24.7 million. Our adjusted working capital (working capital excluding the current portion of capital lease obligations) was $354.9 million as of June 30, 2013, compared to $285.1 million as of December 31, 2012. Our adjusted working capital increased from the prior year end primarily as a result of lower accrued liabilities due to estimated federal tax payments and interest payments on our debt during the first of half 2013. Our total outstanding debt (including capital leases) was $867.8 million, and we have no significant debt maturities until 2016. As of June 30, 2013, we have $185.0 million in borrowings and $54.1 million in committed letters of credit outstanding under our 2011 Credit Facility (defined below), leaving $310.9 million of available borrowing capacity subject to compliance with the terms of our senior secured credit facility.

Cash Flows

The following table summarizes our cash flows for the six-month periods ended June 30, 2013 and 2012:

	Six Months Ended June 30,
	2013			2012
	(in thousands)
Net cash provided by operating activities	$	46,681		$	191,852
Cash paid for capital expenditures	(72,577		)	(309,328		)
Proceeds received from sale of fixed assets	3,881			9,225
Acquisition of the 50% noncontrolling interest in Geostream	(14,600		)	—
Investment in Wilayat Key Energy, LLC	—			(676		)
Repayments of capital lease obligations	(379		)	(1,007		)
Proceeds from long-term debt	—			205,000
Proceeds from borrowings on revolving credit facility	155,000			195,000
Repayments on revolving credit facility	(135,000		)	(300,000		)
Repurchases of common stock	(3,134		)	(7,417		)
Other financing activities, net	(1,570		)	12,926
Effect of exchange rates on cash	484			(2,738		)
Net decrease in cash and cash equivalents	$	(21,214	)	$	(7,163	)

Cash provided by operating activities was $46.7 million and $191.9 million for the six months ended June 30, 2013 and 2012, respectively.

Cash used in investing activities was $83.3 million and $300.8 millionfor the six months endedJune 30, 2013 and 2012, respectively. Investing cash outflows during these periods consisted primarily of capital expenditures. Our capital expenditures through June 30, 2013 primarily related to major maintenance of our existing fleet and equipment. Additionally, during the first quarter of 2013, as previously disclosed, Key funded into escrow $14.6 million for the acquisition of the 50% noncontrolling interest in Geostream, its joint venture in Russia, which closed on April 9, 2013.

Cash provided by financing activities was $14.9 million and $104.5 million during the six months ended June 30, 2013 and 2012, respectively. Overall financing cash inflows for 2013 related to net borrowings on the revolving credit facility. Overall financing cash inflows for 2012 related to the proceeds from the issuance of the Additional 2021 Notes, partially offset by net payments on the revolving credit facility.

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Sources of Liquidity and Capital Resources

Our sources of liquidity include our current cash and cash equivalents, availability under our 2011 Credit Facility, and internally generated cash flows from operations.

Debt Service

We do not have any significant maturities of debt until 2016. Interest on our revolving credit facility is due each quarter. Interest to be paid for the remainder of 2013 is approximately $0.2 million and $23 million related to our 2014 Notes and 2021 Notes (each defined below), respectively. We expect to fund interest payments from cash generated by operations. At June 30, 2013, our annual debt maturities for our 2014 Notes and 2021 Notes and borrowings under our 2011 Credit Facility were as follows:

Year	Principal Payments
	(in thousands)
2013	$	—
2014	3,573
2015	—
2016	185,000
2017 and thereafter	$	675,000
Total principal payments	$	863,573

At June 30, 2013, we were in compliance with all the covenants under the 2011 Credit Facility and the indentures governing the 2014 Notes and 2021 Notes.

8.375% Senior Notes due 2014

We have outstanding $3.6 million aggregate principal amount of 8.375% Senior Notes due 2014 (the “2014 Notes”). The 2014 Notes are general unsecured senior obligations and are subordinate to all of our existing and future secured indebtedness. The 2014 Notes are jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2014 Notes is payable on June 1 and December 1 of each year.

The indenture governing the 2014 Notes contains various covenants. These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions tied to the covenants of our 2011 Credit Facility. We were in compliance with these covenants at June 30, 2013.

6.75% Senior Notes due 2021

We issued $475.0 million aggregate principal amount of 6.75% Senior Notes due 2021 (the “Initial 2021 Notes”) on March 4, 2011 and issued an additional $200.0 million aggregate principal amount of the 2021 Notes the “Additional 2021 Notes” and, together with the Initial 2021 Notes, the “2021 Notes”) in a private placement on March 8, 2012 under an indenture dated March 4, 2011 (the “Base Indenture”), as supplemented by a first supplemental indenture dated March 4, 2011 and amended by a further supplemental indenture dated March 8, 2012 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). We used the net proceeds to repay senior secured indebtedness under our revolving bank credit facility. We capitalized $4.6 million of financing costs associated with the issuance of the 2021 Notes that will be amortized over the term of the notes.

On March 5, 2013, we completed an offer to exchange the $200.0 million in aggregate principal amount of unregistered Additional 2021 Notes for an equal principal amount of such notes registered under the Securities Act of 1933. All of the 2021 Notes are treated as a single class under the Indenture and as of the closing of the exchange offer, bear the same CUSIP and ISIN numbers.

The 2021 Notes are general unsecured senior obligations and are effectively subordinated to all of our existing and future secured indebtedness. The 2021 Notes are or will be jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2021 Notes is payable on March 1 and September 1 of each year. The 2021 Notes mature on March 1, 2021.

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On or after March 1, 2016, the 2021 Notes will be subject to redemption at any time and from time to time at our option, in whole or in part, at the redemption prices below (expressed as percentages of the principal amount redeemed), plus accrued and unpaid interest to the applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the years indicated below:

Year	Percentage
2016	103.375	%
2017	102.250	%
2018	101.125	%
2019 and thereafter	100.000	%

At any time and from time to time before March 1, 2014, we may on any one or more occasions redeem up to 35% of the aggregate principal amount of the outstanding 2021 Notes at a redemption price of 106.75% of the principal amount, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from any one or more equity offerings provided that (i) at least 65% of the aggregate principal amount of the 2021 Notes remains outstanding immediately after each such redemption and (ii) each such redemption occurs within 180 days of the date of the closing of such equity offering.

In addition, at any time and from time to time prior to March 1, 2016, we may, at our option, redeem all or a portion of the 2021 Notes at a redemption price equal to 100% of the principal amount plus a premium with respect to the 2021 Notes plus accrued and unpaid interest to the redemption date. If we experience a change of control, subject to certain exceptions, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of purchase.

We are subject to certain negative covenants under the Indenture. The Indenture limits our ability to, among other things:

• incur additional indebtedness and issue preferred equity interests;

• pay dividends or make other distributions or repurchase or redeem equity interests;

• make loans and investments;

• enter into sale and leaseback transactions;

• sell, transfer or otherwise convey assets;

• create liens;

• enter into transactions with affiliates;

• enter into agreements restricting subsidiaries’ ability to pay dividends;

• designate future subsidiaries as unrestricted subsidiaries; and

• consolidate, merge or sell all or substantially all of the applicable entities’ assets.

These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions relating to the covenants of our 2011 Credit Facility discussed below. Substantially all of the covenants will terminate before the 2021 Notes mature if one of two specified ratings agencies assigns the 2021 Notes an investment grade rating in the future and no events of default exist under the Indenture. As of June 30, 2013, the 2021 Notes were below investment grade. Any covenants that cease to apply to us as a result of achieving an investment grade rating will not be restored, even if the credit rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants at June 30, 2013.

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Senior Secured Credit Facility

We are party to a $550.0 million senior secured revolving bank credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as Co-Documentation Agent (as amended, the “2011 Credit Facility”), which is an important source of liquidity for us. The 2011 Credit Facility consists of a revolving credit facility, letter of credit sub-facility and swing line facility, all of which will mature no later than March 31, 2016.

The maximum amount that we may borrow under the facility may be subject to limitation due to the operation of the covenants contained in the facility. The 2011 Credit Facility allows us to request increases in the total commitments under the facility by up to $100.0 million in the aggregate in part or in full anytime during the term of the 2011 Credit Facility, with any such increases being subject to compliance with the restrictive covenants in the 2011 Credit Facility and in the Indenture governing our 2021 Senior Notes, as well as lender approval.

We capitalized $4.9 million of financing costs in connection with the execution of the 2011 Credit Facility and an additional $1.4 million related to a subsequent amendment that will be amortized over the term of the debt.

The interest rate per annum applicable to the 2011 Credit Facility is, at our option, (i) adjusted LIBOR plus the applicable margin or (ii) the higher of (x) JPMorgan’s prime rate, (y) the Federal Funds rate plus 0.5% and (z) one-month adjusted LIBOR plus 1.0%, plus in each case the applicable margin for all other loans. The applicable margin for LIBOR loans ranges from 225 to 300 basis points, and the applicable margin for all other loans ranges from 125 to 200 basis points, depending upon our consolidated total leverage ratio as defined in the 2011 Credit Facility. Unused commitment fees on the facility equal 0.50%.

The 2011 Credit Facility contains certain financial covenants, which, among other things, limit our annual capital expenditures, restrict our ability to repurchase shares and require us to maintain certain financial ratios. The financial ratios require that:

• our ratio of consolidated funded indebtedness to total capitalization be no greater than 45%;

• our senior secured leverage ratio of senior secured funded debt to trailing four quarters of earnings before interest, taxes, depreciation and amortization (as calculated pursuant to the terms of the 2011 Credit Facility, “EBITDA”) be no greater than 2.00 to 1.00;

• we maintain a collateral coverage ratio, the ratio of the aggregate book value of the collateral to the amount of the total commitments, as of the last day of any fiscal quarter of at least 2:00 to 1:00;

• we maintain a consolidated interest coverage ratio of trailing four quarters EBITDA to interest expense of at least 3.00 to 1.00; and

• we limit our capital expenditures and investments in foreign subsidiaries to $250.0 million per fiscal year, if the consolidated total leverage ratio exceeds 3.00 to 1.00.

In addition, the 2011 Credit Facility contains certain affirmative and negative covenants, including, without limitation, restrictions on (i) liens; (ii) debt, guarantees and other contingent obligations; (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property or assets; (v) loans, acquisitions, joint ventures and other investments (with acquisitions permitted so long as, after giving pro forma effect thereto, no default or event of default exists under the 2011 Credit Facility, the pro forma consolidated total leverage ratio does not exceed 4.00 to 1.00, we are in compliance with other financial covenants and we have at least $25.0 million of availability under the 2011 Credit Facility); (vi) dividends and other distributions to, and redemptions and repurchases from, equity holders; (vii) making investments, loans or advances; (viii) selling properties; (ix) prepaying, redeeming or repurchasing subordinated (contractually or structurally) debt; (x) engaging in transactions with affiliates; (xi) entering into hedging arrangements; (xii) entering into sale and leaseback transactions; (xiii) granting negative pledges other than to the lenders; (xiv) changes in the nature of business; (xv) amending organizational documents; and (xvi) changes in accounting policies or reporting practices; in each of the foregoing cases, with certain exceptions. We were in compliance with these covenants at June 30, 2013. We may prepay the 2011 Credit Facility in whole or in part at any time without premium or penalty, subject to certain reimbursements to the lenders for breakage and redeployment costs. As of June 30, 2013, we had borrowings of $185.0 million outstanding under the revolving credit facility and $54.1 million of letters of credit outstanding, leaving $310.9 million of available borrowing capacity subject to compliance with the debt to capitalization limitation under the terms of the 2011 Credit Facility. The weighted average interest rate on the outstanding borrowings under the 2011 Credit Facility was 2.67% and 2.70% for the three-month periods ended June 30, 2013 and June 30, 2012, respectively, and the weighted average interest rate on the outstanding borrowing under the 2011 Credit Facility was 2.68% and 2.70% for six months endedJune 30, 2013 and June 30, 2012, respectively.

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Capital Lease Agreements

We lease equipment, such as vehicles, tractors, trailers, frac tanks and forklifts, from financial institutions under master lease agreements. As of June 30, 2013, there was less than $0.1 million outstanding under such equipment leases.

Off-Balance Sheet Arrangements

At June 30, 2013 we did not, and we currently do not, have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Liquidity Outlook and Future Capital Requirements

As of June 30, 2013, we had cash and cash equivalents of $24.7 million, available borrowing capacity of $310.9 million subject to compliance with the terms of the 2011 Credit Facility, and no significant debt maturities until 2016. We believe that our internally generated cash flows from operations and current reserves of cash and cash equivalents will be sufficient to finance the majority of our cash requirements for operations, budgeted capital expenditures, and debt service for the next twelve months. Also, as we have historically done, we may, from time to time, access available funds under our 2011 Credit Facility to supplement our liquidity to meet cash requirements for day-to-day operations and times of peak needs throughout the year. Our planned capital expenditures, as well as any acquisitions we choose to pursue, could be financed through a combination of cash on hand, borrowings under our 2011 Credit Facility and, in the case of acquisitions, equity.

Capital Expenditures

During the six months ended June 30, 2013, our capital expenditures totaled $72.6 million, primarily related to major maintenance of our existing fleet and equipment. Our capital expenditure plan for 2013 is $210.0 million for equipment maintenance needs, including ongoing upgrades to our rig services fleet. Our capital expenditure program for 2013 is subject to market conditions, including activity levels, commodity prices, industry capacity and specific customer needs. Our focus for 2013 has been and continues to be the maximization of our current equipment fleet, but we may choose to increase our capital expenditures in 2013 to increase market share or expand our presence into a new market. We may also incur capital expenditures for strategic investments and acquisitions. We currently anticipate funding our 2013 capital expenditures through a combination of cash on hand, operating cash flow, and borrowings under our 2011 Credit Facility. Should our operating cash flows or activity levels prove to be insufficient to fund our currently planned capital spending levels, management expects it will adjust our capital spending plans accordingly.

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ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our quantitative and qualitative disclosures about market risk from those disclosed in our 2012 Form 10-K. More detailed information concerning market risk can be found in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk“ in our 2012 Form 10-K.

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ITEM 4.     CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, management performed, with the participation of our Chief Executive Officer and our Chief Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on this evaluation, management concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the second quarter of 2013 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to various suits and claims that have arisen in the ordinary course of business. We do not believe that the disposition of any of our ordinary course litigation will result in a material adverse effect on our consolidated financial position, results of operations or cash flows. For additional information on legal proceedings, see “Note 12. Commitments and Contingencies” in “Item 1. Financial Statements” of Part I of this report, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

As of the date of this filing, there have been no material changes in the risk factors previously disclosed in Part I, “Item 1A. Risk Factors” of our 2012 Form 10-K, except as follows:    

Increasing regulatory expansion could adversely impact costs associated with our offshore fishing and rental services.

The scope of regulation of our services may increase in light of the April 2010 Macondo accident in the Gulf of Mexico, including possible increases in liabilities or funding requirements imposed by governmental agencies. In 2012, the Bureau of Safety and Environmental Enforcement, or BSEE, expanded its regulatory oversight beyond oil and gas operators to include service and equipment contractors. In addition, U.S. federal law imposes on certain entities deemed to be “responsible parties” a variety of regulations related to the prevention of oil spills, releases of hazardous substances, and liability for removal costs and natural resource, real property and certain economic damages arising from such incidents. Some of these laws may impose strict and/or joint and several liability for certain costs and damages without regard to the conduct of the parties. As a provider of services and rental equipment for offshore drilling and workover services, we may be deemed a “responsible party” under federal law. The implementation of such laws and the adoption and implementation of future regulatory initiatives, or the specific responsibilities that may arise from such initiatives may subject us to increased costs and liabilities, which could interrupt our operations or have an adverse effect on our revenue or results of operations.

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ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended June 30, 2013, we repurchased the shares shown in the table below to satisfy tax withholding obligations upon the vesting of restricted stock awarded to certain of our employees:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Number of Shares Purchased (1)	Weighted Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Amount of Shares that may yet be Purchased Under the Plans or Programs
April 1, 2013 to April 30, 2013	12,375	$	6.12	—	$	—
May 1, 2013 to May 31, 2013	7,189	6.29		—	—
June 1, 2013 to June 30, 2013	90,994	5.96		—	—
Total	110,558	$	6.00	—	$	—

(1) Represents shares repurchased to satisfy tax withholding obligations upon the vesting of restricted stock awards.

(2) The price paid per share with respect to the tax withholding repurchases was determined using the closing prices on the applicable vesting date, as quoted on the NYSE.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The Exhibit Index, which follows the signature pages to this report and is incorporated by reference herein, sets forth a list of exhibits to this report.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		KEY ENERGY SERVICES, INC. (Registrant)
Date:	August 2, 2013	By:	/s/ J. MARSHALL DODSON
			J. Marshall Dodson
			Senior Vice President and Chief Financial Officer (As duly authorized officer and Principal Financial Officer)

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EXHIBIT INDEX

3.1	Articles of Restatement of Key Energy Services, Inc. (Incorporated by reference to Exhibit 3.1 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, File No. 001-08038.)
3.2	Unanimous consent of the Board of Directors of Key Energy Services, Inc. dated January 11, 2000, limiting the designation of the additional authorized shares to common stock. (Incorporated by reference to Exhibit 3.2 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, File No. 001-08038.)
3.3	Fifth Amended and Restated By-laws of Key Energy Services, Inc. as amended through July 19, 2012. (Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on July 20, 2012, File No. 001-08038.)
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Interactive Data File.

* Filed herewith

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Richard J. Alario, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Key Energy Services, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	August 2, 2013	/s/ RICHARD J. ALARIO
		Richard J. Alario
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT

I, J. Marshall Dodson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Key Energy Services;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	August 2, 2013	/s/ J. MARSHALL DODSON
		J. Marshall Dodson
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned officers of Key Energy Services, Inc. (the "Company") hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002, to such officer's knowledge that:

(1) the accompanying Quarterly Report on Form 10-Q for the period ended June 30, 2013 as filed with the U.S. Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods expressed in the Report.

Dated:	August 2, 2013	/s/ RICHARD J. ALARIO
		Richard J. Alario
		President and Chief Executive Officer
		(Principal Executive Officer)

Dated:	August 2, 2013	/s/ J. MARSHALL DODSON
		J. Marshall Dodson
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

XML

LONG-TERM DEBT

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

As of June 30, 2013 and December 31, 2012, the components of our long-term debt were as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
6.75% Senior Notes due 2021	$	675,000		$	675,000
8.375% Senior Notes due 2014	3,573			3,573
Senior Secured Credit Facility revolving loans due 2016	185,000			165,000
Net unamortized premium on debt	4,259			4,537
Capital lease obligations	13			393
Total debt	867,845			848,503
Less current portion	(13		)	(393		)
Long-term debt and capital leases	$	867,832		$	848,110

8.375% Senior Notes due 2014

We have outstanding $3.6 million aggregate principal amount of 8.375% Senior Notes due 2014 (the “2014 Notes”). The 2014 Notes are general unsecured senior obligations and are subordinate to all of our existing and future secured indebtedness. The 2014 Notes are jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2014 Notes is payable on June 1 and December 1 of each year.

The indenture governing the 2014 Notes contains various covenants. These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions tied to the covenants of our 2011 Credit Facility (defined below). We were in compliance with these covenants at June 30, 2013.

6.75% Senior Notes due 2021

We issued $475.0 million aggregate principal amount of 6.75% Senior Notes due 2021 (the “Initial 2021 Notes”) on March 4, 2011 and issued an additional $200.0 million aggregate principal amount of the 2021 Notes (the “Additional 2021 Notes” and together with the Initial 2021 Notes, the “2021 Notes”) in a private placement on March 8, 2012 under an indenture dated March 4, 2011 (the “Base Indenture”), as supplemented by a first supplemental indenture dated March 4, 2011 and amended by a further supplemental indenture dated March 8, 2012 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). We used the net proceeds to repay senior secured indebtedness under our revolving bank credit facility. We capitalized $4.6 million of financing costs associated with the issuance of the 2021 Notes that will be amortized over the term of the notes.

On March 5, 2013, we completed an offer to exchange the $200.0 million in aggregate principal amount of unregistered Additional 2021 Notes for an equal principal amount of such notes registered under the Securities Act of 1933. All of the 2021 Notes are treated as a single class under the Indenture and as of the closing of the exchange offers bear the same CUSIP and ISIN numbers.

The 2021 Notes are general unsecured senior obligations and are effectively subordinated to all of our existing and future secured indebtedness. The 2021 Notes are or will be jointly and severally guaranteed on a senior unsecured basis by certain of our existing and future domestic subsidiaries. Interest on the 2021 Notes is payable on March 1 and September 1 of each year. The 2021 Notes mature on March 1, 2021.

On or after March 1, 2016, the 2021 Notes will be subject to redemption at any time and from time to time at our option, in whole or in part, at the redemption prices below (expressed as percentages of the principal amount redeemed), plus accrued and unpaid interest to the applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the years indicated below:

Year	Percentage
2016	103.375	%
2017	102.250	%
2018	101.125	%
2019 and thereafter	100.000	%

At any time and from time to time before March 1, 2014, we may on any one or more occasions redeem up to 35% of the aggregate principal amount of the outstanding 2021 Notes at a redemption price of 106.75% of the principal amount, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from any one or more equity offerings provided that (i) at least 65% of the aggregate principal amount of the 2021 Notes remains outstanding immediately after each such redemption and (ii) each such redemption occurs within 180 days of the date of the closing of such equity offering.

In addition, at any time and from time to time prior to March 1, 2016, we may, at our option, redeem all or a portion of the 2021 Notes at a redemption price equal to 100% of the principal amount plus a premium with respect to the 2021 Notes plus accrued and unpaid interest to the redemption date. If we experience a change of control, subject to certain exceptions, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of purchase.

We are subject to certain negative covenants under the Indenture. The Indenture limits our ability to, among other things:

• incur additional indebtedness and issue preferred equity interests;

• pay dividends or make other distributions or repurchase or redeem equity interests;

• make loans and investments;

• enter into sale and leaseback transactions;

• sell, transfer or otherwise convey assets;

• create liens;

• enter into transactions with affiliates;

• enter into agreements restricting subsidiaries’ ability to pay dividends;

• designate future subsidiaries as unrestricted subsidiaries; and

• consolidate, merge or sell all or substantially all of the applicable entities’ assets.

These covenants are subject to certain exceptions and qualifications, and contain cross-default provisions relating to the covenants of our 2011 Credit Facility discussed below. Substantially all of the covenants will terminate before the 2021 Notes mature if one of two specified ratings agencies assigns the 2021 Notes an investment grade rating in the future and no events of default exist under the Indenture. As of June 30, 2013, the 2021 Notes were below investment grade. Any covenants that cease to apply to us as a result of achieving an investment grade rating will not be restored, even if the credit rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants as of June 30, 2013.

Senior Secured Credit Facility

We are party to a $550.0 million senior secured revolving bank credit facility with JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA, as Co-Documentation Agent (as amended, the “2011 Credit Facility”), which is an important source of liquidity for us. The 2011 Credit Facility consists of a revolving credit facility, letter of credit sub-facility and swing line facility, all of which will mature no later than March 31, 2016.

The maximum amount that we may borrow under the facility may be subject to limitation due to the operation of the covenants contained in the facility. The 2011 Credit Facility allows us to request increases in the total commitments under the facility by up to $100.0 million in the aggregate in part or in full anytime during the term of the 2011 Credit Facility, with any such increases being subject to compliance with the restrictive covenants in the 2011 Credit Facility and in the Indenture governing our 2021 Senior Notes, as well as lender approval.

We capitalized $4.9 million of financing costs in connection with the execution of the 2011 Credit Facility and an additional $1.4 million related to a subsequent amendment that will be amortized over the term of the debt.

The interest rate per annum applicable to the 2011 Credit Facility is, at our option, (i) adjusted LIBOR plus the applicable margin or (ii) the higher of (x) JPMorgan’s prime rate, (y) the Federal Funds rate plus 0.5% and (z) one-month adjusted LIBOR plus 1.0%, plus in each case the applicable margin for all other loans. The applicable margin for LIBOR loans ranges from 225 to 300 basis points, and the applicable margin for all other loans ranges from 125 to 200 basis points, depending upon our consolidated total leverage ratio as defined in the 2011 Credit Facility. Unused commitment fees on the facility equal 0.50%.

The 2011 Credit Facility contains certain financial covenants, which, among other things, limit our annual capital expenditures, restrict our ability to repurchase shares and require us to maintain certain financial ratios. The financial ratios require that:

• our ratio of consolidated funded indebtedness to total capitalization be no greater than 45%;

• our senior secured leverage ratio of senior secured funded debt to trailing four quarters of earnings before interest, taxes, depreciation and amortization (as calculated pursuant to the terms of the 2011 Credit Facility, “EBITDA”) be no greater than 2.00 to 1.00;

• we maintain a collateral coverage ratio, the ratio of the aggregate book value of the collateral to the amount of the total commitments, as of the last day of any fiscal quarter of at least 2:00 to 1:00;

• we maintain a consolidated interest coverage ratio of trailing four quarters EBITDA to interest expense of at least 3.00 to 1.00; and

• we limit our capital expenditures and investments in foreign subsidiaries to $250.0 million per fiscal year, if the consolidated total leverage ratio exceeds 3.00 to 1.00.

In addition, the 2011 Credit Facility contains certain affirmative and negative covenants, including, without limitation, restrictions on (i) liens; (ii) debt, guarantees and other contingent obligations; (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property or assets; (v) loans, acquisitions, joint ventures and other investments (with acquisitions permitted so long as, after giving pro forma effect thereto, no default or event of default exists under the 2011 Credit Facility, the pro forma consolidated total leverage ratio does not exceed 4.00 to 1.00, we are in compliance with other financial covenants and we have at least $25.0 million of availability under the 2011 Credit Facility); (vi) dividends and other distributions to, and redemptions and repurchases from, equity holders; (vii) making investments, loans or advances; (viii) selling properties; (ix) prepaying, redeeming or repurchasing subordinated (contractually or structurally) debt; (x) engaging in transactions with affiliates; (xi) entering into hedging arrangements; (xii) entering into sale and leaseback transactions; (xiii) granting negative pledges other than to the lenders; (xiv) changes in the nature of business; (xv) amending organizational documents; and (xvi) changes in accounting policies or reporting practices; in each of the foregoing cases, with certain exceptions.

We were in compliance with these covenants as of June 30, 2013. We may prepay the 2011 Credit Facility in whole or in part at any time without premium or penalty, subject to certain reimbursements to the lenders for breakage and redeployment costs. As of June 30, 2013, we had borrowings of $185.0 million outstanding under the revolving credit facility and $54.1 million of letters of credit outstanding, leaving $310.9 million of available borrowing capacity subject to compliance with the debt to capitalization limitation under the terms of the 2011 Credit Facility. The weighted average interest rate on the outstanding borrowings under the 2011 Credit Facility was 2.67% and 2.70% for the three-month periods ended June 30, 2013 and June 30, 2012, respectively, and the weighted average interest rate on the outstanding borrowing under the 2011 Credit Facility was 2.68% and 2.70% for six months endedJune 30, 2013 and June 30, 2012, respectively.

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GOODWILL AND OTHER INTANGIBLE ASSETS - Weighted Average Remaining Amortization Periods and Expected Amortization Expense for Next Five Years for Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Finite-Lived Intangible Assets [Line Items]
Remainder of 2013	$ 9,691
Expected Amortization Expense-2014	9,962
Expected Amortization Expense-2015	5,650
Expected Amortization Expense-2016	3,907
Expected Amortization Expense-2017	2,696
Expected Amortization Expense-2018	1,358
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining amortization period (years)	1 year 3 months 18 days
Remainder of 2013	869
Expected Amortization Expense-2014	1,338
Expected Amortization Expense-2015	0
Expected Amortization Expense-2016	0
Expected Amortization Expense-2017	0
Expected Amortization Expense-2018	0
Patents, trademarks and tradename
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining amortization period (years)	4 years 10 months 24 days
Remainder of 2013	63
Expected Amortization Expense-2014	119
Expected Amortization Expense-2015	55
Expected Amortization Expense-2016	40
Expected Amortization Expense-2017	40
Expected Amortization Expense-2018	17
Customer relationships and contracts
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining amortization period (years)	6 years 7 months 6 days
Remainder of 2013	8,477
Expected Amortization Expense-2014	7,952
Expected Amortization Expense-2015	5,090
Expected Amortization Expense-2016	3,439
Expected Amortization Expense-2017	2,368
Expected Amortization Expense-2018	1,120
Developed technology
Finite-Lived Intangible Assets [Line Items]
Weighted average remaining amortization period (years)	17 years 6 months
Remainder of 2013	282
Expected Amortization Expense-2014	553
Expected Amortization Expense-2015	505
Expected Amortization Expense-2016	428
Expected Amortization Expense-2017	288
Expected Amortization Expense-2018	$ 221

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
REVENUES	$ 411,390	$ 515,997	$ 839,839	$ 1,002,748
COSTS AND EXPENSES:
Direct operating expenses	287,102	343,996	586,284	655,493
Depreciation and amortization expense	58,208	52,452	112,401	103,641
General and administrative expenses	57,736	58,081	120,981	118,999
Operating income	8,344	61,468	20,173	124,615
Interest expense, net of amounts capitalized	13,984	13,730	27,788	25,612
Other (income) loss, net	430	(1,380)	(793)	(2,409)
Income (loss) from continuing operations before tax	(6,070)	49,118	(6,822)	101,412
Income tax benefit (expense)	2,298	(17,419)	2,864	(36,232)
Income (loss) from continuing operations	(3,772)	31,699	(3,958)	65,180
Loss from discontinued operations, net of tax benefit of $-, $1,501, $- and $17,855, respectively	0	(2,454)	0	(33,359)
Net income (loss)	(3,772)	29,245	(3,958)	31,821
Income (loss) attributable to noncontrolling interest	356	204	444	(410)
INCOME (LOSS) ATTRIBUTABLE TO KEY	(4,128)	29,041	(4,402)	32,231
Income (loss) from continuing operations attributable to Key:
Income (loss) from continuing operations	(3,772)	31,699	(3,958)	65,180
Income (loss) attributable to noncontrolling interest	356	204	444	(410)
Income (loss) from continuing operations attributable to Key	$ (4,128)	$ 31,495	$ (4,402)	$ 65,590
Earnings (loss) per share from continuing operations attributable to Key:
Basic and diluted (in usd per share)	$ (0.03)	$ 0.21	$ (0.03)	$ 0.43
Loss per share from discontinued operations:
Basic and diluted (in usd per share)	$ 0.00	$ (0.02)	$ 0.00	$ (0.22)
Earnings (loss) per share attributable to Key:
Basic and diluted (in usd per share)	$ (0.03)	$ 0.19	$ (0.03)	$ 0.21
Weighted average shares outstanding:
Basic (in shares)	152,384	151,087	152,175	151,110
Diluted (in shares)	152,384	151,100	152,175	151,168

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The preparation of these unaudited condensed consolidated financial statements requires us to develop estimates and to make assumptions that affect our financial position, results of operations and cash flows. These estimates may also impact the nature and extent of our disclosure, if any, of our contingent liabilities. Among other things, we use estimates to (i) analyze assets for possible impairment, (ii) determine depreciable lives for our assets, (iii) assess future tax exposure and realization of deferred tax assets, (iv) determine amounts to accrue for contingencies, (v) value tangible and intangible assets, (vi) assess workers’ compensation, vehicular liability, self-insured risk accruals and other insurance reserves, (vii) provide allowances for our uncollectible accounts receivable, (viii) value our asset retirement obligations, and (ix) value our equity-based compensation. We review all significant estimates on a recurring basis and record the effect of any necessary adjustments prior to publication of our financial statements. Adjustments made with respect to the use of estimates relate to improved information not previously available. Because of the limitations inherent in this process, our actual results may differ materially from these estimates. We believe that the estimates used in the preparation of these interim financial statements are reasonable.

There have been no material changes or developments in our evaluation of accounting estimates and underlying assumptions or methodologies that we believe to be a “Critical Accounting Policy or Estimate” as disclosed in our 2012 Form 10-K.

Accounting Standards Adopted or Not Yet Adopted in this Report

There are no new accounting standards that have been adopted or not yet adopted in this report.

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of June 30, 2013 and December 31, 2012.

Cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet date.

	June 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	12,955		12,955		12,955		12,955
Financial liabilities:
6.75% Senior Notes	$	675,000	$	663,188	$	675,000	$	680,510
8.375% Senior Notes	3,573		3,637		3,573		3,656
Credit Facility revolving loans	185,000		185,000		165,000		165,000

Notes receivable — Argentina operations sale. The fair value of these notes receivable is based upon the quoted market Treasury rates as of the twelve, eighteen and twenty-four month maturity dates indicated. The carrying values of these items approximate their fair values due to the maturity dates rapidly approaching, thus giving way to discount rates that are similar.

6.75% Senior Notes due 2021. The fair value of these notes are based upon the quoted market prices for those securities as of the dates indicated. The carrying value of these notes as of June 30, 2013 was $675.0 million, and the fair value was $663.2 million (98.3% of carrying value).

8.375% Senior Notes due 2014. The fair value of our 2014 Notes is based upon the quoted market prices for those securities as of the dates indicated. The carrying value of these notes as of June 30, 2013 was $3.6 million, and the fair value was $3.6 million (101.8% of carrying value).

Credit Facility Revolving Loans. Because of their variable interest rates, the fair values of the revolving loans borrowed under our 2012 Credit Facility approximate their carrying values. The carrying and fair values of these loans as of June 30, 2013 were $185.0 million.

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS - Carrying Amounts and Estimated Fair Values of Financial Instruments (Detail) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Financial liabilities:
Credit Facility revolving loans, carrying value	$ 185,000,000	$ 165,000,000
Financial liabilities:
Credit Facility revolving loans, fair value	185,000,000	165,000,000
Senior Notes 6.75% Issued March 24 2011
Financial liabilities:
Senior notes, carrying value	675,000,000	675,000,000
Financial liabilities:
Senior Notes, fair value	663,188,000	680,510,000
Senior Notes 8.375 Percent Due 2014
Financial liabilities:
Senior notes, carrying value	3,573,000	3,573,000
Financial liabilities:
Senior Notes, fair value	3,637,000	3,656,000
Argentina Operations
Financial assets:
Notes and accounts receivable - related parties, carrying amount	12,955,000	12,955,000
Financial assets:
Notes and accounts receivable - related parties, fair value	$ 12,955,000	$ 12,955,000

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LONG-TERM DEBT - 8.75% Senior Notes due 2014 (Details) (Senior Notes 8.375 Percent Due 2014, USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Debt Instrument [Line Items]
Debt stated percentage	8.375%
Senior Notes
Debt Instrument [Line Items]
Long-term debt	$ 3.6
Debt stated percentage	8.375%
Debt instrument interest rate payment date	Interest on the 2014 Notes is payable on June 1 and December 1 of each year.

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OTHER INCOME, NET

6 Months Ended

Jun. 30, 2013

Other Income and Expenses [Abstract]

OTHER INOME, NET

OTHER (INCOME) LOSS

The table below presents comparative detailed information about our other income and expense, shown on the condensed consolidated statements of operations as “Other (income) loss, net” for the periods indicated:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)
Interest income	$	(84	)	$	(7	)	$	(95	)	$	(14	)
Foreign exchange (gain) loss	1,398			(766		)	473			(1,705		)
Other income, net	(884		)	(607		)	(1,171		)	(690		)
Total	$	430		$	(1,380	)	$	(793	)	$	(2,409	)

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OTHER BALANCE SHEET INFORMATION - Other Current Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Other current assets:
Deferred tax assets	$ 27,444	$ 20,026
Prepaid current assets	25,673	27,736
Reinsurance receivable	9,660	10,217
VAT asset	36,506	32,762
Other	22,853	10,092
Total	$ 122,136	$ 100,833

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LONG-TERM DEBT - 6.75% Senior Notes due 2021 (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Mar. 08, 2012	Mar. 04, 2011
Fiscal Year 2016
Debt Instrument [Line Items]
Debt redemption price percent of principal amount	103.375%
Fiscal Year 2017
Debt Instrument [Line Items]
Debt redemption price percent of principal amount	102.25%
Fiscal Year 2018
Debt Instrument [Line Items]
Debt redemption price percent of principal amount	101.125%
Fiscal Year 2019 And Thereafter
Debt Instrument [Line Items]
Debt redemption price percent of principal amount	100.00%
Senior Notes 6.75 Percent Due 2021 | Prior To March 1, 2014
Debt Instrument [Line Items]
Senior notes, call feature	At any time and from time to time before March 1, 2014, we may on any one or more occasions redeem up to 35% of the aggregate principal amount of the outstanding 2021 Notes at a redemption price of 106.750% of the principal amount, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from any one or more equity offerings provided that (i) at least 65% of the aggregate principal amount of the 2021 Notes remains outstanding immediately after each such redemption and (ii) each such redemption shall occur within 180 days of the date of the closing of such equity offering.
Senior notes, latest call date	Mar. 01, 2014
Maximum amount as percentage of aggregate principal amount of outstanding debt that can be redeemed	35.00%
Debt redemption price percent of principal amount	106.75%
Required percentage of aggregate principal amount of debt that remains outstanding immediately after redemption minimum	65.00%
Time period after the date of closing of equity offering within which the redemption of the notes shall occur			180 days
Senior Notes 6.75 Percent Due 2021 | Prior To March 1, 2016
Debt Instrument [Line Items]
Senior notes, call feature	In addition, at any time and from time to time prior to March 1, 2016, we may, at our option, redeem all or a portion of the 2021 Notes at a redemption price equal to 100% of the principal amount plus a premium with respect to the 2021 Notes plus accrued and unpaid interest to the redemption date. If we experience a change of control, subject to certain exceptions, we must give holders of the 2021 Notes the opportunity to sell to us their 2021 Notes, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of purchase.
Senior notes, latest call date	Mar. 01, 2016
Debt redemption price percent of principal amount	100.00%
Debt purchase price percent of principal amount	101.00%
Senior Notes | Senior Notes 6.75 Percent Due 2021
Debt Instrument [Line Items]
Senior notes, carrying value		$ 200,000,000.0	$ 475,000,000.0
Debt stated percentage			6.75%
Capitalized finance costs	$ 4,600,000
Debt instrument interest rate payment date	Interest on the 2021 Notes is payable on March 1 and September 1 of each year.
Senior notes, maturity date	Mar. 01, 2021

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Number Of Performance Units Earned Based on Relative Placement of Total Stockholder Return for Period Within Peer Group

The number of performance units that may be earned by a participant is determined at the end of each performance period based on the relative placement of Key’s total stockholder return for that period within the peer group, as follows:

Company Placement for the Performance Period	Percentile Ranking in Peer Group		Performance Units Earned as a Percentage of Target
First	100	%	200	%
Second	91	%	180	%
Third	82	%	160	%
Fourth	73	%	140	%
Fifth	64	%	120	%
Sixth	55	%	100	%
Seventh	45	%	75	%
Eighth	36	%	50	%
Ninth	27	%	25	%
Tenth	18	%	0	%
Eleventh	9	%	0	%
Twelfth	0	%	0	%

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VARIABLE INTEREST ENTITIES

6 Months Ended

Jun. 30, 2013

Variable Interest Entities [Abstract]

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

On March 7, 2010, we entered into an agreement with AlMansoori Petroleum Services LLC (“AlMansoori”) to form the joint venture AlMansoori Key Energy Services LLC, a joint venture under the laws of Abu Dhabi, UAE. The purpose of the joint venture is to engage in conventional workover and drilling services, coiled tubing services, fishing and rental services, rig monitoring services, pipe handling services and fluids, waste treatment and handling services. AlMansoori holds a 51% interest in the joint venture while we hold a 49% interest. However, we hold three of the five board of directors seats and a controlling financial interest. Future capital contributions to the joint venture will be made on equal terms and in equal amounts, and any future share capital increases will be issued in proportion to the initial share capital percentages but paid for by AlMansoori and Key in equal amounts. Also, we share the profits and losses of the joint venture on equal terms and in equal amounts with AlMansoori. The joint venture does not have sufficient resources to carry on its activities without our financial support; accordingly, we have determined it to be a variable interest entity of which we are the primary beneficiary. We consolidate the entity in our financial statements. We have guaranteed the performance of the joint venture under its sole services contract valued at $2.0 million. Creditors of the joint venture have no recourse to us other than pursuant to this guarantee.

For the three and six months ended June 30, 2013, we recognized $4.6 million and $8.6 million of revenue, respectively, and $0.8 million and $1.7 million of net income, respectively, associated with this joint venture. For the three and six months ended June 30, 2012, we recognized $4.0 million and $7.3 million of revenue, respectively, and $0.8 million and $1.0 million of net income, respectively, associated with this joint venture. At June 30, 2013, there were approximately $16.6 million of assets and $13.4 million of liabilities in the joint venture. At December 31, 2012, there were approximately $16.2 million of assets and $14.7 million of liabilities in the joint venture. There are no restrictions on the use of assets and liabilities associated with the joint venture.

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2013

Condensed Consolidating Financial Statements [Abstract]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Our 2021 Notes are guaranteed by our domestic subsidiaries, all of which are wholly owned. The guarantees are joint and several, full, complete and unconditional. There are no restrictions on the ability of subsidiary guarantors to transfer funds to the parent company.

As a result of these guarantee arrangements, we are required to present the following condensed consolidating financial information pursuant to SEC Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”

CONDENSED CONSOLIDATING BALANCE SHEETS
	June 30, 2013
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands) (unaudited)
Assets:
Current assets	$	51,099	$	510,280	$	58,488		$	—		$	619,867
Property and equipment, net	—		1,288,438		106,155			—			1,394,593
Goodwill	—		597,458		27,400			—			624,858
Deferred financing costs, net	15,301		—		—			—			15,301
Intercompany notes and accounts receivable and investment in subsidiaries	3,463,047		1,203,469		(4,502		)	(4,662,014		)	—
Other assets	4,082		31,664		42,072			—			77,818
TOTAL ASSETS	$	3,533,529	$	3,631,309	$	229,613		$	(4,662,014	)	$	2,732,437
Liabilities and equity:
Current liabilities	$	23,013	$	215,451	$	26,553		$	—		$	265,017
Long-term debt and capital leases, less current portion	867,832		—		—			—			867,832
Intercompany notes and accounts payable	1,108,780		2,640,108		52,601			(3,801,489		)	—
Deferred tax liabilities	262,722		6,781		(478		)	—			269,025
Other long-term liabilities	1,548		59,216		147			—			60,911
Equity	1,269,634		709,753		150,790			(860,525		)	1,269,652
TOTAL LIABILITIES AND EQUITY	$	3,533,529	$	3,631,309	$	229,613		$	(4,662,014	)	$	2,732,437

CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2012
	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	66,435		$	469,049	$	54,310		$	—		$	589,794
Property and equipment, net	—			1,329,379		107,295			—			1,436,674
Goodwill	—			597,458		29,023			—			626,481
Deferred financing costs, net	16,628			—		—			—			16,628
Intercompany notes and accounts receivable and investment in subsidiaries	3,298,679			1,108,231		(20,371		)	(4,386,539		)	—
Other assets	8,068			39,696		44,247			—			92,011
TOTAL ASSETS	$	3,389,810	—	$	3,543,813	$	214,504		$	(4,386,539	)	$	2,761,588
Liabilities and equity:
Current liabilities	$	46,632		$	226,773	$	31,691		$	—		$	305,096
Long-term debt and capital leases, less current portion	848,110			—		—			—			848,110
Intercompany notes and accounts payable	947,700			2,590,398		14,138			(3,552,236		)	—
Deferred tax liabilities	258,528			6,781		(746		)	(5,110		)	259,453
Other long-term liabilities	1,528			60,068		1			—			61,597
Equity	1,287,312			659,793		169,420			(829,193		)	1,287,332
TOTAL LIABILITIES AND EQUITY	$	3,389,810		$	3,543,813	$	214,504		$	(4,386,539	)	$	2,761,588

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	23		$	389,847		$	44,807		$	(23,287	)	$	411,390
Direct operating expense	—			273,188			32,637			(18,723		)	287,102
Depreciation and amortization expense	—			55,533			2,675			—			58,208
General and administrative expense	262			52,543			9,449			(4,518		)	57,736
Operating (loss) income	(239		)	8,583			46			(46		)	8,344
Interest expense, net of amounts capitalized	14,124			(155		)	15			—			13,984
Other expense (income), net	(911		)	(77		)	701			717			430
Income (loss) from continuing operations before taxes	(13,452		)	8,815			(670		)	(763		)	(6,070		)
Income tax benefit (expense)	(3,631		)	6,154			(225		)	—			2,298
Income (loss) from continuing operations	(17,083		)	14,969			(895		)	(763		)	(3,772		)
Discontinued operations	—			—			—			—			—
Net income (loss)	(17,083		)	14,969			(895		)	(763		)	(3,772		)
Income attributable to noncontrolling interest	—			—			356			—			356
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(17,083	)	$	14,969		$	(1,251	)	$	(763	)	$	(4,128	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	493,046		$	41,609		$	(18,658	)	$	515,997
Direct operating expense	—			331,139			28,908			(16,051		)	343,996
Depreciation and amortization expense	—			50,354			2,098			—			52,452
General and administrative expense	303			53,286			7,080			(2,588		)	58,081
Operating (loss) income	(303		)	58,267			3,523			(19		)	61,468
Interest expense, net of amounts capitalized	14,112			(385		)	3			—			13,730
Other expense (income), net	(895		)	75			(651		)	91			(1,380		)
Income (loss) from continuing operations before taxes	(13,520		)	58,577			4,171			(110		)	49,118
Income tax expense	(14,984		)	(1,376		)	(1,059		)	—			(17,419		)
Income (loss) from continuing operations	(28,504		)	57,201			3,112			(110		)	31,699
Discontinued operations	—			—			(2,454		)	—			(2,454		)
Net income (loss)	(28,504		)	57,201			658			(110		)	29,245
Income attributable to noncontrolling interest	—			—			204			—			204
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(28,504	)	$	57,201		$	454		$	(110	)	$	29,041

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	147		$	795,231		$	88,297		$	(43,836	)	$	839,839
Direct operating expense	—			559,230			63,120			(36,066		)	586,284
Depreciation and amortization expense	—			107,590			4,811			—			112,401
General and administrative expense	516			110,364			18,301			(8,200		)	120,981
Operating (loss) income	(369		)	18,047			2,065			430			20,173
Interest expense, net of amounts capitalized	28,015			(291		)	64			—			27,788
Other expense (income), net	(1,809		)	(1,246		)	738			1,524			(793		)
Income (loss) from continuing operations before taxes	(26,575		)	19,584			1,263			(1,094		)	(6,822		)
Income tax benefit (expense)	(2,383		)	5,271			(24		)	—			2,864
Income (loss) from continuing operations	(28,958		)	24,855			1,239			(1,094		)	(3,958		)
Discontinued operations	—			—			—			—			—
Net income (loss)	(28,958		)	24,855			1,239			(1,094		)	(3,958		)
Income attributable to noncontrolling interest	—			—			444			—			444
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(28,958	)	$	24,855		$	795		$	(1,094	)	$	(4,402	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	15		$	958,316		$	74,595		$	(30,178	)	$	1,002,748
Direct operating expense	—			626,776			53,691			(24,974		)	655,493
Depreciation and amortization expense	—			100,021			3,620			—			103,641
General and administrative expense	573			111,006			12,603			(5,183		)	118,999
Operating (loss) income	(558		)	120,513			4,681			(21		)	124,615
Interest expense, net of amounts capitalized	26,259			(658		)	11			—			25,612
Other expense (income), net	(1,506		)	657			(1,728		)	168			(2,409		)
Income (loss) from continuing operations before taxes	(25,311		)	120,514			6,398			(189		)	101,412
Income tax expense	(32,946		)	(1,581		)	(1,705		)	—			(36,232		)
Income (loss) from continuing operations	(58,257		)	118,933			4,693			(189		)	65,180
Discontinued operations	—			—			(33,359		)	—			(33,359		)
Net income (loss)	(58,257		)	118,933			(28,666		)	(189		)	31,821
Loss attributable to noncontrolling interest	—			—			(410		)	—			(410		)
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(58,257	)	$	118,933		$	(28,256	)	$	(189	)	$	32,231

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	45,284		$	1,397		$	—		$	46,681
Cash flows from investing activities:
Capital expenditures	—			(69,413		)	(3,164		)	—			(72,577		)
Acquisition of the 50% noncontrolling interest in Geostream	—			(14,600		)	—			—			(14,600		)
Intercompany notes and accounts	—			36,539			—			(36,539		)	—
Other investing activities, net				3,881			—			—			3,881
Net cash used in investing activities	—			(43,593		)	(3,164		)	(36,539		)	(83,296		)
Cash flows from financing activities:
Repayment of capital lease obligations	—			(379		)	—			—			(379		)
Proceeds from borrowings on revolving credit facility	155,000			—			—			—			155,000
Repayments on revolving credit facility	(135,000		)	—			—			—			(135,000		)
Payment of deferred financing costs	(69		)	—			—			—			(69		)
Repurchases of common stock	(3,134		)	—			—			—			(3,134		)
Intercompany notes and accounts	(36,539		)	—			—			36,539			—
Other financing activities, net	(1,501		)	—			—			—			(1,501		)
Net cash provided by (used in) financing activities	(21,243		)	(379		)	—			36,539			14,917
Effect of changes in exchange rates on cash	—			—			484			—			484
Net increase (decrease) in cash and cash equivalents	(21,243		)	1,312			(1,283		)	—			(21,214		)
Cash and cash equivalents at beginning of period	39,617			1,601			4,731			—			45,949
Cash and cash equivalents at end of period	$	18,374		$	2,913		$	3,448		$	—		$	24,735

	Six Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	(24,658	)	$	210,219		$	6,291		$	—		$	191,852
Cash flows from investing activities:
Capital expenditures	—			(302,754		)	(6,574		)	—			(309,328		)
Intercompany notes and accounts	676			67,769			—			(68,445		)	—
Other investing activities, net	(676		)	9,225			—			—			8,549
Net cash used in investing activities	—			(225,760		)	(6,574		)	(68,445		)	(300,779		)
Cash flows from financing activities:
Proceeds from long-term debt	205,000						—			—			205,000
Repayment of capital lease obligations	—			(1,007		)	—			—			(1,007		)
Proceeds from borrowings on revolving credit facility	195,000			—			—			—			195,000
Repayments on revolving credit facility	(300,000		)	—			—			—			(300,000		)
Payment of deferred financing costs	(4,534		)	—			—			—			(4,534		)
Repurchases of common stock	(7,417		)	—			—			—			(7,417		)
Intercompany notes and accounts	(67,769		)	(676		)	—			68,445			—
Other financing activities, net	4,859			10,914			1,687			—			17,460
Net cash provided by financing activities	25,139			9,231			1,687			68,445			104,502
Effect of changes in exchange rates on cash	—			—			(2,738		)	—			(2,738		)
Net increase (decrease) in cash and cash equivalents	481			(6,310		)	(1,334		)	—			(7,163		)
Cash and cash equivalents at beginning of period	21,673			7,985			5,785			—			35,443
Cash and cash equivalents at end of period	$	22,154		$	1,675		$	4,451		$	—		$	28,280

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SEVERANCE, CONTRACT TERMINATION AND MOBILIZATION COSTS - Narrative (Details) (USD $)	3 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	$ 3,203,000	$ 0
Severance
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	332,000	0
Lease Cancellation Fees
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	1,630,000	0
Mobilization Costs
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	1,241,000	0
U.S.
Restructuring Cost and Reserve [Line Items]
Redeployment costs	2,600,000
Accrued restructuring reserve	1,870,000	0
U.S. | Severance
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	22,000	0
U.S. | Lease Cancellation Fees
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	1,630,000	0
U.S. | Mobilization Costs
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	218,000	0
International
Restructuring Cost and Reserve [Line Items]
Number of rigs redeployed	7
Total equipment mobilization cost	2,300,000
Redeployment costs	7,200,000
Accrued restructuring reserve	1,333,000	0
International | Severance
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	310,000	0
International | Lease Cancellation Fees
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	0	0
International | Mobilization Costs
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	1,023,000	0
International | Direct Operating Expenses
Restructuring Cost and Reserve [Line Items]
Redeployment costs	8,300,000
International | General and Administrative Expenses
Restructuring Cost and Reserve [Line Items]
Redeployment costs	2,200,000
Functional Support
Restructuring Cost and Reserve [Line Items]
Redeployment costs	700,000
Accrued restructuring reserve	0	0
Functional Support | Severance
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	0	0
Functional Support | Lease Cancellation Fees
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	0	0
Functional Support | Mobilization Costs
Restructuring Cost and Reserve [Line Items]
Accrued restructuring reserve	0	0
Fluid Management Services | U.S.
Restructuring Cost and Reserve [Line Items]
Severance expenses	6,300,000
Lease cancellation fees	$ 1,900,000

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the six months endedJune 30, 2013 are as follows:

	U.S.		International			Total
	(in thousands)
December 31, 2012	$	597,456	$	29,025		$	626,481
Impact of foreign currency translation	—		(1,623		)	(1,623		)
June 30, 2013	$	597,456	$	27,402		$	624,858

Other Intangible Assets

The components of our other intangible assets as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
Noncompete agreements:
Gross carrying value	$	7,134		$	9,332
Accumulated amortization	(4,927		)	(5,022		)
Net carrying value	$	2,207		$	4,310
Patents, trademarks and tradename:
Gross carrying value	$	14,044		$	14,689
Accumulated amortization	(473		)	(410		)
Net carrying value	$	13,571		$	14,279
Customer relationships and contracts:
Gross carrying value	$	100,256		$	100,481
Accumulated amortization	(70,446		)	(62,143		)
Net carrying value	$	29,810		$	38,338
Developed technology:
Gross carrying value	$	9,780		$	7,583
Accumulated amortization	(4,852		)	(3,605		)
Net carrying value	$	4,928		$	3,978
Customer Backlog:
Gross carrying value	$	776		$	779
Accumulated amortization	(776		)	(779		)
Net carrying value	$	—		$	—

Weighted Average Remaining Amortization Periods and Expected Amortization Expense for the Next Five Years for Intangible

The weighted average remaining amortization periods and expected amortization expense for the next five years for our definite lived intangible assets are as follows:

	Weighted average remaining amortization period (years)	Expected Amortization Expense
		Remainder of 2013		2014		2015		2016		2017		2018
		(in thousands)
Noncompete agreements	1.3	$	869	$	1,338	$	—	$	—	$	—	$	—
Patents and trademarks	4.9	63		119		55		40		40		17
Customer relationships and contracts	6.6	8,477		7,952		5,090		3,439		2,368		1,120
Developed technology	17.5	282		553		505		428		288		221
Total expected intangible asset amortization expense		$	9,691	$	9,962	$	5,650	$	3,907	$	2,696	$	1,358

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Information

The following tables set forth our unaudited segment information as of and for the three and six months ended June 30, 2013 and 2012. (in thousands):

As of and for the three months ended June 30, 2013
	U.S.			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	361,698		$	49,692		$	—		$	—		$	411,390
Intersegment revenues	(139		)	2,676			23			(2,560		)	—
Depreciation and amortization	47,484			7,463			3,261			—			58,208
Other operating expenses	259,121			53,235			32,482			—			344,838
Operating income (loss)	55,093			(11,006		)	(35,743		)	—			8,344
Interest expense, net of amounts capitalized	—			15			13,969			—			13,984
Income (loss) from continuing operations before tax	55,210			(11,762		)	(49,518		)	—			(6,070		)
Long-lived assets(1)	1,671,666			333,096			292,818			(185,010		)	2,112,570
Total assets	2,654,754			556,325			23,035			(501,677		)	2,732,437
Capital expenditures, excluding acquisitions	26,659			2,196			6,578			—			35,433

As of and for the three months ended June 30, 2012
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	431,646	$	84,351	$	—		$	—		$	515,997
Intersegment revenues	—		1,195		—			(1,195		)	—
Depreciation and amortization	44,838		4,526		3,088			—			52,452
Other operating expenses	304,311		63,709		34,057			—			402,077
Operating income (loss)	82,497		16,116		(37,145		)	—			61,468
Interest expense, net of amounts capitalized	4		1		13,725			—			13,730
Income (loss) from continuing operations before tax	82,530		17,073		(50,485		)	—			49,118
Long-lived assets(1)	1,907,653		308,497		301,454			(344,309		)	2,173,295
Total assets	2,591,329		502,735		408,233			(711,977		)	2,790,320
Capital expenditures, excluding acquisitions	85,406		39,321		15,163			—			139,890

As of and for the six months ended June 30, 2013
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	707,770	$	132,069	$	—		$	—		$	839,839
Intersegment revenues	8,462		4,195		147			(12,804		)	—
Depreciation and amortization	92,274		13,963		6,164			—			112,401
Other operating expenses	522,128		117,238		67,899			—			707,265
Operating income (loss)	93,368		868		(74,063		)	—			20,173
Interest expense, net of amounts capitalized	1		64		27,723			—			27,788
Income (loss) from continuing operations before tax	93,419		1,294		(101,535		)	—			(6,822		)
Long-lived assets(1)	1,671,666		333,096		292,818			(185,010		)	2,112,570
Total assets	2,654,754		556,325		23,035			(501,677		)	2,732,437
Capital expenditures, excluding acquisitions	49,969		13,163		9,445			—			72,577

As of and for the six months ended June 30, 2012
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	856,619	$	146,129	$	—		$	—		$	1,002,748
Intersegment revenues	—		2,152		15			(2,167		)	—
Depreciation and amortization	89,189		8,473		5,979			—			103,641
Other operating expenses	593,475		111,172		69,845			—			774,492
Operating income (loss)	173,955		26,484		(75,824		)	—			124,615
Interest expense, net of amounts capitalized	12		14		25,586			—			25,612
Income (loss) from continuing operations before tax	174,082		28,300		(100,970		)	—			101,412
Long-lived assets(1)	1,907,653		308,497		301,454			(344,309		)	2,173,295
Total assets	2,591,329		502,735		408,233			(711,977		)	2,790,320
Capital expenditures, excluding acquisitions	164,816		124,777		19,735			—			309,328

(1) Long lived assets include: fixed assets, goodwill, intangibles and other assets.

(2) Functional Support is geographically located in the United States

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OTHER BALANCE SHEET INFORMATION - Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Other current liabilities:
Accrued payroll, taxes and employee benefits	$ 36,054	$ 31,708
Accrued operating expenditures	42,890	42,137
Income, sales, use and other taxes	40,152	62,709
Self-insurance reserve	34,539	35,742
Accrued interest	16,010	15,301
Insurance premium financing	2,999	8,021
Share-based compensation and other liabilities	2,088	5,012
Total	$ 174,732	$ 200,630

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EQUITY AND NONCONTROLLING INTEREST (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Schedule of Stockholders Equity

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2013 is as follows :

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2012	151,070		$	15,108		$	925,132		$	(6,148	)	$	319,736		$	33,504		$	1,287,332
Foreign currency translation	—		—			—			(4,699		)	—			(667		)	(5,366		)
Common stock purchases	(410	)	(42		)	(3,092		)	—						—			(3,134		)
Share-based compensation	1,783		178			9,215			—			—			—			9,393
Tax benefits from share-based compensation	—		—			(1,501		)	—			—			—			(1,501		)
Acquisition of the 50% noncontrolling interest in Geostream (Note 3)	—		—			22,432			(4,350		)	—			(31,196		)	(13,114		)
Net income (loss)	—		—			—			—			(4,402		)	444			(3,958		)
BALANCE AT JUNE 30, 2013	152,443		$	15,244		$	952,186		$	(15,197	)	$	315,334		$	2,085		$	1,269,652

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2012 is as follows :

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2011	150,733		$	15,073		$	915,400		$	(58,231	)	$	312,114	$	30,275		$	1,214,631
Foreign currency translation	—		—			—			(1,393		)	—		(1,128		)	(2,521		)
Common stock purchases	(468	)	(47		)	(7,370		)	—			—		—			(7,417		)
Exercise of stock options and warrants	89		9			803			—			—		—			812
Share-based compensation	855		86			8,358			—			—		—			8,444
Tax benefits from share-based compensation	—		—			4,047			—			—		—			4,047
Shares surrendered	(68	)	(7		)	(999		)	—			—		—			(1,006		)
Net income (loss)	—		—			—			—			32,231		(410		)	31,821
BALANCE AT JUNE 30, 2012	151,141		$	15,114		$	920,239		$	(59,624	)	$	344,345	$	28,737		$	1,248,811

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SHARE-BASED COMPENSATION - Additional Information (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended	1 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Restricted Stock	Jun. 30, 2013 Performance Based Units	Jan. 31, 2013 Performance Based Units Performance Unit Awards 2012	Feb. 28, 2012 Performance Based Units Performance Unit Awards 2013	May 31, 2013 2012 Equity and Cash Incentive Plan Outside directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense recognized	$ 2.2	$ 2.2	$ 8.1	$ 8.3					$ 1.8
Income tax benefit recognized	0.9	0.8	3.1	3.0
Compensation expense expected to be recognized					14.3	1.6
Compensation expense expected to be recognized, weighted average remaining vesting period					1 year 4 months 24 days	1 year 7 months 6 days
Shares of common stock issued									288,780
Performance units issued							400,000	200,000
Fair value of outstanding performance units issued	$ 2.4		$ 2.4
Award requisite service period			2 years

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Unaudited Statements of Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	$ 411,390	$ 515,997	$ 839,839	$ 1,002,748
Direct operating expense	287,102	343,996	586,284	655,493
Depreciation and amortization expense	58,208	52,452	112,401	103,641
General and administrative expense	57,736	58,081	120,981	118,999
Operating income	8,344	61,468	20,173	124,615
Interest expense, net of amounts capitalized	13,984	13,730	27,788	25,612
Other income, net	430	(1,380)	(793)	(2,409)
Income (loss) from continuing operations before tax	(6,070)	49,118	(6,822)	101,412
Income tax expense (benefit)	2,298	(17,419)	2,864	(36,232)
Income (loss) from continuing operations	(3,772)	31,699	(3,958)	65,180
Discontinued operations	0	(2,454)	0	(33,359)
Net income (loss)	(3,772)	29,245	(3,958)	31,821
Income (loss) attributable to noncontrolling interest	356	204	444	(410)
INCOME (LOSS) ATTRIBUTABLE TO KEY	(4,128)	29,041	(4,402)	32,231
Parent Company
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	23	0	147	15
Direct operating expense	0	0	0	0
Depreciation and amortization expense	0	0	0	0
General and administrative expense	262	303	516	573
Operating income	(239)	(303)	(369)	(558)
Interest expense, net of amounts capitalized	14,124	14,112	28,015	26,259
Other income, net	(911)	(895)	(1,809)	(1,506)
Income (loss) from continuing operations before tax	(13,452)	(13,520)	(26,575)	(25,311)
Income tax expense (benefit)	(3,631)	(14,984)	(2,383)	(32,946)
Income (loss) from continuing operations	(17,083)	(28,504)	(28,958)	(58,257)
Discontinued operations	0	0	0	0
Net income (loss)	(17,083)	(28,504)	(28,958)	(58,257)
Income (loss) attributable to noncontrolling interest	0	0	0	0
INCOME (LOSS) ATTRIBUTABLE TO KEY	(17,083)	(28,504)	(28,958)	(58,257)
Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	389,847	493,046	795,231	958,316
Direct operating expense	273,188	331,139	559,230	626,776
Depreciation and amortization expense	55,533	50,354	107,590	100,021
General and administrative expense	52,543	53,286	110,364	111,006
Operating income	8,583	58,267	18,047	120,513
Interest expense, net of amounts capitalized	(155)	(385)	(291)	(658)
Other income, net	(77)	75	(1,246)	657
Income (loss) from continuing operations before tax	8,815	58,577	19,584	120,514
Income tax expense (benefit)	6,154	(1,376)	5,271	(1,581)
Income (loss) from continuing operations	14,969	57,201	24,855	118,933
Discontinued operations	0	0	0	0
Net income (loss)	14,969	57,201	24,855	118,933
Income (loss) attributable to noncontrolling interest	0	0	0	0
INCOME (LOSS) ATTRIBUTABLE TO KEY	14,969	57,201	24,855	118,933
Non-Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	44,807	41,609	88,297	74,595
Direct operating expense	32,637	28,908	63,120	53,691
Depreciation and amortization expense	2,675	2,098	4,811	3,620
General and administrative expense	9,449	7,080	18,301	12,603
Operating income	46	3,523	2,065	4,681
Interest expense, net of amounts capitalized	15	3	64	11
Other income, net	701	(651)	738	(1,728)
Income (loss) from continuing operations before tax	(670)	4,171	1,263	6,398
Income tax expense (benefit)	(225)	(1,059)	(24)	(1,705)
Income (loss) from continuing operations	(895)	3,112	1,239	4,693
Discontinued operations	0	(2,454)	0	(33,359)
Net income (loss)	(895)	658	1,239	(28,666)
Income (loss) attributable to noncontrolling interest	356	204	444	(410)
INCOME (LOSS) ATTRIBUTABLE TO KEY	(1,251)	454	795	(28,256)
Eliminations
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	(23,287)	(18,658)	(43,836)	(30,178)
Direct operating expense	(18,723)	(16,051)	(36,066)	(24,974)
Depreciation and amortization expense	0	0	0	0
General and administrative expense	(4,518)	(2,588)	(8,200)	(5,183)
Operating income	(46)	(19)	430	(21)
Interest expense, net of amounts capitalized	0	0	0	0
Other income, net	717	91	1,524	168
Income (loss) from continuing operations before tax	(763)	(110)	(1,094)	(189)
Income tax expense (benefit)	0	0	0	0
Income (loss) from continuing operations	(763)	(110)	(1,094)	(189)
Discontinued operations	0	0	0	0
Net income (loss)	(763)	(110)	(1,094)	(189)
Income (loss) attributable to noncontrolling interest	0	0	0	0
INCOME (LOSS) ATTRIBUTABLE TO KEY	$ (763)	$ (110)	$ (1,094)	$ (189)

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EARNINGS PER SHARE - Additional Information (Details) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2013 Stock Option	Jun. 30, 2012 Stock Option	Jun. 30, 2012 Stock Option	Jun. 30, 2012 Stock Appreciation Rights (SARs)	Jun. 30, 2013 Stock Appreciation Rights (SARs)	Jun. 30, 2012 Stock Appreciation Rights (SARs)
Antidilutive Securiites Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	1.7	1.9	1.5	0.4	0.3	0.4

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DISCONTINUED OPERATIONS - Additional Information (Detail) (USD $)	6 Months Ended		1 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Sep. 30, 2012 Argentine Operations	Sep. 30, 2012 Argentine Operations	Jun. 30, 2012 Argentine Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of operations			$ 12,500,000
Loss on sale of operations			85,800,000
Disposal group, aggregate pre-tax non cash charge	41,457,000	0			41,500,000
Loss on write off				$ 51,900,000

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SEGMENT INFORMATION - Additional Information (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended				3 Months Ended
	Jun. 30, 2013 ft	Jun. 30, 2013 Geostream	Apr. 09, 2013 Geostream	Oct. 31, 2008 Geostream	Jun. 30, 2013 Geostream International	Apr. 09, 2013 Geostream International
Segment Reporting Information [Line Items]
Percentage of noncontrolling interest acquired		50.00%	50.00%	26.00%		50.00%
Aggregate cost of acquired interest			$ 14.6	$ 17.4		$ 14.6
Cumulative percentage ownership after all transactions					100.00%
Description of rigs used	Our rigs encompass various sizes and capabilities, allowing us to service all types of wells with depths up to 20,000 feet.
Maximum depth of wells that can be serviced (in feet)	20,000

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Our operating segments are U.S. and International. We also have a “Functional Support” segment associated with managing each of our reportable operating segments. Our domestic rig services, fluid management services, fishing and rental services, and coiled tubing services are aggregated within our U.S. reportable segment. Our international rig services business and our Canadian technology development group are aggregated within our International reportable segment. We evaluate the performance of our operating segments based on revenue and income measures. All inter-segment sales pricing is based on current market conditions. The following is a description of the segments:

U.S. Segment

Rig-Based Services

Our rig-based services include the completion of newly drilled wells, workover and recompletion of existing oil and natural gas wells, well maintenance, and the plugging and abandonment of wells at the end of their useful lives. We also provide specialty drilling services to oil and natural gas producers with certain of our larger rigs that are capable of providing conventional and horizontal drilling services. Our rigs encompass various sizes and capabilities, allowing us to service all types of wells with depths up to 20,000 feet. Many of our rigs are outfitted with our proprietary KeyView® technology, which captures and reports well site operating data and provides safety control systems. We believe that this technology allows our customers and our crews to better monitor well site operations, improves efficiency and safety, and adds value to the services that we offer.

The completion and recompletion services provided by our rigs prepare wells for production, whether newly drilled, or recently extended through a workover operation. The completion process may involve selectively perforating the well casing to access production zones, stimulating and testing these zones, and installing tubular and downhole equipment. We typically provide a well service rig and may also provide other equipment to assist in the completion process. Completion services vary by well and our work may take a few days to several weeks to perform, depending on the nature of the completion.

The workover services that we provide are designed to enhance the production of existing wells and generally are more complex and time consuming than normal maintenance services. Workover services can include deepening or extending wellbores into new formations by drilling horizontal or lateral wellbores, sealing off depleted production zones and accessing previously bypassed production zones, converting former production wells into injection wells for enhanced recovery operations and conducting major subsurface repairs due to equipment failures. Workover services may last from a few days to several weeks, depending on the complexity of the workover.

Maintenance services provided with our rig fleet are generally required throughout the life cycle of an oil or natural gas well. Examples of these maintenance services include routine mechanical repairs to the pumps, tubing and other equipment, removing debris and formation material from wellbores, and pulling rods and other downhole equipment from wellbores to identify and resolve production problems. Maintenance services are generally less complicated than completion and workover related services and require less time to perform.

Our rig fleet is also used in the process of permanently shutting-in oil or natural gas wells that are at the end of their productive lives. These plugging and abandonment services generally require auxiliary equipment in addition to a well servicing rig. The demand for plugging and abandonment services is not significantly impacted by the demand for oil and natural gas because well operators are required by state regulations to plug wells that are no longer productive.

Fluid Management Services

We provide transportation and well-site storage services for various fluids utilized in connection with drilling, completions, workover and maintenance activities. We also provide disposal services for fluids produced subsequent to well completion.  These fluids are removed from the well site and transported for disposal in saltwater disposal wells owned by us or a third party. In addition, we operate a fleet of hot oilers capable of pumping heated fluids used to clear soluble restrictions in a wellbore. Demand and pricing for these services generally correspond to demand for our well service rigs.

Coiled Tubing Services

Coiled tubing services involve the use of a continuous metal pipe spooled onto a large reel which is then deployed into oil and natural gas wells to perform various applications, such as wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations utilizing acid and chemical treatments. Coiled tubing is also used for a number of horizontal well applications such as milling temporary isolation plugs that separate frac zones, and various other pre- and post- hydraulic fracturing well preparation services.

Fishing and Rental Services

We offer a full line of services and rental equipment designed for use in providing both onshore and offshore drilling and workover services. Fishing services involve recovering lost or stuck equipment in the wellbore utilizing a broad array of “fishing tools.” Our rental tool inventory consists of drill pipe, tubulars, handling tools (including our patented Hydra-Walk^® pipe-handling units and services), pressure-control equipment, pumps, power swivels, reversing units, foam air units, frac stack equipment used to support hydraulic fracturing operations and the associated flowback of frac fluids, proppants, oil and natural gas. We also provide well testing services.

Demand for our fishing and rental services is also closely related to capital spending by oil and natural gas producers, which is generally a function of oil and natural gas prices.

International Segment

Our International segment includes operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada. Also, we operated in Argentina prior to the sale of that business in the third quarter of 2012. We are reporting the results of our former Argentina business as discontinued operations for all periods presented. We provide rig-based services such as the maintenance, workover, recompletion of existing oil wells, completion of newly-drilled wells, and plugging and abandonment of wells at the end of their useful lives in each of our international markets.

In addition, in Mexico we provide drilling, coiled tubing, wireline, project management and consulting services. Our work in Mexico also requires us to provide third party services that vary in scope by project.

In the Middle East, we operate in the Kingdom of Bahrain and Oman. Our business in Bahrain is currently conducted through a joint venture in which we have a controlling interest.

Our Russian operations provide drilling, workover, and reservoir engineering services. On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream, a limited liability company incorporated in the Russian Federation, for $14.6 million. Key now owns 100% of Geostream . See “Note 3. Acquisition of Noncontrolling Interest in Geostream” for further discussion.

Our technology development and control systems business based in Canada is focused on the development of hardware and software related to oilfield service equipment controls, data acquisition and digital information flow.

Functional Support Segment

Our Functional Support segment includes unallocated overhead costs associated with administrative support for our U.S. and International reporting segments.

The following tables set forth our unaudited segment information as of and for the three and six months ended June 30, 2013 and 2012. (in thousands):

As of and for the three months ended June 30, 2013
	U.S.			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	361,698		$	49,692		$	—		$	—		$	411,390
Intersegment revenues	(139		)	2,676			23			(2,560		)	—
Depreciation and amortization	47,484			7,463			3,261			—			58,208
Other operating expenses	259,121			53,235			32,482			—			344,838
Operating income (loss)	55,093			(11,006		)	(35,743		)	—			8,344
Interest expense, net of amounts capitalized	—			15			13,969			—			13,984
Income (loss) from continuing operations before tax	55,210			(11,762		)	(49,518		)	—			(6,070		)
Long-lived assets(1)	1,671,666			333,096			292,818			(185,010		)	2,112,570
Total assets	2,654,754			556,325			23,035			(501,677		)	2,732,437
Capital expenditures, excluding acquisitions	26,659			2,196			6,578			—			35,433

As of and for the three months ended June 30, 2012
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	431,646	$	84,351	$	—		$	—		$	515,997
Intersegment revenues	—		1,195		—			(1,195		)	—
Depreciation and amortization	44,838		4,526		3,088			—			52,452
Other operating expenses	304,311		63,709		34,057			—			402,077
Operating income (loss)	82,497		16,116		(37,145		)	—			61,468
Interest expense, net of amounts capitalized	4		1		13,725			—			13,730
Income (loss) from continuing operations before tax	82,530		17,073		(50,485		)	—			49,118
Long-lived assets(1)	1,907,653		308,497		301,454			(344,309		)	2,173,295
Total assets	2,591,329		502,735		408,233			(711,977		)	2,790,320
Capital expenditures, excluding acquisitions	85,406		39,321		15,163			—			139,890

As of and for the six months ended June 30, 2013
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	707,770	$	132,069	$	—		$	—		$	839,839
Intersegment revenues	8,462		4,195		147			(12,804		)	—
Depreciation and amortization	92,274		13,963		6,164			—			112,401
Other operating expenses	522,128		117,238		67,899			—			707,265
Operating income (loss)	93,368		868		(74,063		)	—			20,173
Interest expense, net of amounts capitalized	1		64		27,723			—			27,788
Income (loss) from continuing operations before tax	93,419		1,294		(101,535		)	—			(6,822		)
Long-lived assets(1)	1,671,666		333,096		292,818			(185,010		)	2,112,570
Total assets	2,654,754		556,325		23,035			(501,677		)	2,732,437
Capital expenditures, excluding acquisitions	49,969		13,163		9,445			—			72,577

As of and for the six months ended June 30, 2012
	U.S.		International		Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	856,619	$	146,129	$	—		$	—		$	1,002,748
Intersegment revenues	—		2,152		15			(2,167		)	—
Depreciation and amortization	89,189		8,473		5,979			—			103,641
Other operating expenses	593,475		111,172		69,845			—			774,492
Operating income (loss)	173,955		26,484		(75,824		)	—			124,615
Interest expense, net of amounts capitalized	12		14		25,586			—			25,612
Income (loss) from continuing operations before tax	174,082		28,300		(100,970		)	—			101,412
Long-lived assets(1)	1,907,653		308,497		301,454			(344,309		)	2,173,295
Total assets	2,591,329		502,735		408,233			(711,977		)	2,790,320
Capital expenditures, excluding acquisitions	164,816		124,777		19,735			—			309,328

(1) Long lived assets include: fixed assets, goodwill, intangibles and other assets.

(2) Functional Support is geographically located in the United States.

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement of Other Comprehensive Income [Abstract]
INCOME (LOSS) FROM CONTINUING OPERATIONS	$ (3,772)	$ 31,699	$ (3,958)	$ 65,180
Other comprehensive loss, net of tax:
Foreign currency translation loss	(3,848)	(9,573)	(5,366)	(2,521)
Total other comprehensive loss, net of tax	(3,848)	(9,573)	(5,366)	(2,521)
COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS, NET OF TAX	(7,620)	22,126	(9,324)	62,659
Comprehensive loss from discontinued operations	0	(2,454)	0	(33,359)
COMPREHENSIVE INCOME (LOSS)	(7,620)	19,672	(9,324)	29,300
Comprehensive (income) loss attributable to noncontrolling interest	(367)	3,952	223	1,538
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO KEY	$ (7,987)	$ 23,624	$ (9,101)	$ 30,838

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (Geostream)	Jun. 30, 2013	Apr. 09, 2013	Oct. 31, 2008
Geostream
Percentage of noncontrolling interest acquired	50.00%	50.00%	26.00%

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ACQUISITION OF NONCONTROLLING INTEREST IN GEOSTREAM

6 Months Ended

Jun. 30, 2013

Noncontrolling Interest [Abstract]

ACQUISITION OF NONCONTROLLING INTEREST IN GEOSTREAM

ACQUISITION OF NONCONTROLLING INTEREST IN GEOSTREAM

On October 31, 2008, we acquired a 26% interest in OOO Geostream Services Group (“Geostream”), a limited liability company incorporated in the Russian Federation that provides a wide range of drilling, workover and reservoir engineering services for $17.4 million. On September 1, 2009, we acquired an additional 24% interest for $16.4 million, which brought our total investment in Geostream to 50% and provided us a controlling interest with representation on Geostream's board of directors. We accounted for the second investment as a business combination achieved in stages. The results of Geostream have been included in our consolidated financial statements since the initial acquisition date, with the portion outside of our control forming a noncontrolling interest.

On April 9, 2013, we completed the acquisition of the 50% noncontrolling interest in Geostream for $14.6 million. Geostream is now our wholly owned subsidiary. This acquisition of the 50% noncontrolling interest in Geostream was accounted for as an equity transaction. Therefore, changes in our ownership interest of Geostream as a result of the acquisition in the second quarter of 2013 did not result in a gain or loss transaction.

The effects of changes in our ownership interest in Geostream were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013			2012
	(in thousands)
Net Income (loss) attributable to Key	$	(4,128	)	$	29,041	$	(4,402	)	$	32,231
Transfers from the noncontrolling interest
Increase in Key's paid-in capital for purchase of the 50% noncontrolling interest in Geostream	22,432			—		22,432			—
Net transfers from noncontrolling interest	22,432			—		22,432			—
Change from net income (loss) attributable to Key and transfers from noncontrolling interest	$	18,304		$	29,041	$	18,030		$	32,231

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Unaudited Statements Of Cash Flows (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	$ 46,681	$ 191,852
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(72,577)	(309,328)
Acquisition of the 50% noncontrolling interest in Geostream	(14,600)
Intercompany notes and accounts	0	0
Other investing activities, net	3,881	8,549
Net cash used in investing activities	(83,296)	(300,779)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from long-term debt	0	205,000
Repayment of capital lease obligations	(379)	(1,007)
Proceeds from borrowings on revolving credit facility	155,000	195,000
Repayments on revolving credit facility	(135,000)	(300,000)
Payment of deferred financing costs	(69)	(4,534)
Repurchases of common stock	(3,134)	(7,417)
Intercompany notes and accounts	0	0
Other financing activities, net	(1,501)	17,460
Net cash provided by financing activities	14,917	104,502
Effect of changes in exchange rates on cash	484	(2,738)
Cash and Cash Equivalents, Period Increase (Decrease)	(21,214)	(7,163)
Cash and cash equivalents, beginning of period	45,949	35,443
Cash and cash equivalents, end of period	24,735	28,280
Parent Company
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	0	(24,658)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	0	0
Acquisition of the 50% noncontrolling interest in Geostream	0
Intercompany notes and accounts	0	676
Other investing activities, net		(676)
Net cash used in investing activities	0	0
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from long-term debt		205,000
Repayment of capital lease obligations	0	0
Proceeds from borrowings on revolving credit facility	155,000	195,000
Repayments on revolving credit facility	(135,000)	(300,000)
Payment of deferred financing costs	(69)	(4,534)
Repurchases of common stock	(3,134)	(7,417)
Intercompany notes and accounts	(36,539)	(67,769)
Other financing activities, net	(1,501)	4,859
Net cash provided by financing activities	(21,243)	25,139
Effect of changes in exchange rates on cash	0	0
Cash and Cash Equivalents, Period Increase (Decrease)	(21,243)	481
Cash and cash equivalents, beginning of period	39,617	21,673
Cash and cash equivalents, end of period	18,374	22,154
Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	45,284	210,219
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(69,413)	(302,754)
Acquisition of the 50% noncontrolling interest in Geostream	(14,600)
Intercompany notes and accounts	36,539	67,769
Other investing activities, net	3,881	9,225
Net cash used in investing activities	(43,593)	(225,760)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from long-term debt
Repayment of capital lease obligations	(379)	(1,007)
Proceeds from borrowings on revolving credit facility	0	0
Repayments on revolving credit facility	0	0
Payment of deferred financing costs	0	0
Repurchases of common stock	0	0
Intercompany notes and accounts	0	(676)
Other financing activities, net	0	10,914
Net cash provided by financing activities	(379)	9,231
Effect of changes in exchange rates on cash	0	0
Cash and Cash Equivalents, Period Increase (Decrease)	1,312	(6,310)
Cash and cash equivalents, beginning of period	1,601	7,985
Cash and cash equivalents, end of period	2,913	1,675
Non-Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	1,397	6,291
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(3,164)	(6,574)
Acquisition of the 50% noncontrolling interest in Geostream	0
Intercompany notes and accounts	0	0
Other investing activities, net	0	0
Net cash used in investing activities	(3,164)	(6,574)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from long-term debt		0
Repayment of capital lease obligations	0	0
Proceeds from borrowings on revolving credit facility	0	0
Repayments on revolving credit facility	0	0
Payment of deferred financing costs	0	0
Repurchases of common stock	0	0
Intercompany notes and accounts	0	0
Other financing activities, net	0	1,687
Net cash provided by financing activities	0	1,687
Effect of changes in exchange rates on cash	484	(2,738)
Cash and Cash Equivalents, Period Increase (Decrease)	(1,283)	(1,334)
Cash and cash equivalents, beginning of period	4,731	5,785
Cash and cash equivalents, end of period	3,448	4,451
Eliminations
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by operating activities	0	0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	0	0
Acquisition of the 50% noncontrolling interest in Geostream	0
Intercompany notes and accounts	(36,539)	(68,445)
Other investing activities, net	0	0
Net cash used in investing activities	(36,539)	(68,445)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from long-term debt		0
Repayment of capital lease obligations	0	0
Proceeds from borrowings on revolving credit facility	0	0
Repayments on revolving credit facility	0	0
Payment of deferred financing costs	0	0
Repurchases of common stock	0	0
Intercompany notes and accounts	36,539	68,445
Other financing activities, net	0	0
Net cash provided by financing activities	36,539	68,445
Effect of changes in exchange rates on cash	0	0
Cash and Cash Equivalents, Period Increase (Decrease)	0	0
Cash and cash equivalents, beginning of period	0	0
Cash and cash equivalents, end of period	$ 0	$ 0

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GENERAL

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

GENERAL

Key Energy Services, Inc., its wholly owned subsidiaries and its controlled subsidiaries (collectively, “Key,” the “Company,” “we,” “us,” “its,” and “our”) provide a full range of well services to major oil companies, foreign national oil companies and independent oil and natural gas production companies. Our services include rig-based and coiled tubing-based well maintenance and workover services, well completion and recompletion services, fluid management services, fishing and rental services, and other ancillary oilfield services. Additionally, certain rigs are capable of specialty drilling applications. We operate in most major oil and natural gas producing regions of the continental United States and have operations in Mexico, Colombia, Ecuador, the Middle East and Russia. In addition, we have a technology development and control systems business based in Canada.

The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The condensed December 31, 2012 balance sheet was prepared from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012 (the “2012 Form 10-K”). Certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2012 Form 10-K.

The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented herein. The results of operations for the three months and six months ended June 30, 2013 are not necessarily indicative of the results expected for the full year or any other interim period, due to fluctuations in demand for our services, timing of maintenance and other expenditures, and other factors.

We have evaluated events occurring after the balance sheet date included in this Quarterly Report on Form 10-Q and through the date on which the unaudited condensed consolidated financial statements were issued, for possible disclosure of a subsequent event.

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables)

6 Months Ended

Jun. 30, 2013

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEETS
	June 30, 2013
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands) (unaudited)
Assets:
Current assets	$	51,099	$	510,280	$	58,488		$	—		$	619,867
Property and equipment, net	—		1,288,438		106,155			—			1,394,593
Goodwill	—		597,458		27,400			—			624,858
Deferred financing costs, net	15,301		—		—			—			15,301
Intercompany notes and accounts receivable and investment in subsidiaries	3,463,047		1,203,469		(4,502		)	(4,662,014		)	—
Other assets	4,082		31,664		42,072			—			77,818
TOTAL ASSETS	$	3,533,529	$	3,631,309	$	229,613		$	(4,662,014	)	$	2,732,437
Liabilities and equity:
Current liabilities	$	23,013	$	215,451	$	26,553		$	—		$	265,017
Long-term debt and capital leases, less current portion	867,832		—		—			—			867,832
Intercompany notes and accounts payable	1,108,780		2,640,108		52,601			(3,801,489		)	—
Deferred tax liabilities	262,722		6,781		(478		)	—			269,025
Other long-term liabilities	1,548		59,216		147			—			60,911
Equity	1,269,634		709,753		150,790			(860,525		)	1,269,652
TOTAL LIABILITIES AND EQUITY	$	3,533,529	$	3,631,309	$	229,613		$	(4,662,014	)	$	2,732,437

CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2012
	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	66,435		$	469,049	$	54,310		$	—		$	589,794
Property and equipment, net	—			1,329,379		107,295			—			1,436,674
Goodwill	—			597,458		29,023			—			626,481
Deferred financing costs, net	16,628			—		—			—			16,628
Intercompany notes and accounts receivable and investment in subsidiaries	3,298,679			1,108,231		(20,371		)	(4,386,539		)	—
Other assets	8,068			39,696		44,247			—			92,011
TOTAL ASSETS	$	3,389,810	—	$	3,543,813	$	214,504		$	(4,386,539	)	$	2,761,588
Liabilities and equity:
Current liabilities	$	46,632		$	226,773	$	31,691		$	—		$	305,096
Long-term debt and capital leases, less current portion	848,110			—		—			—			848,110
Intercompany notes and accounts payable	947,700			2,590,398		14,138			(3,552,236		)	—
Deferred tax liabilities	258,528			6,781		(746		)	(5,110		)	259,453
Other long-term liabilities	1,528			60,068		1			—			61,597
Equity	1,287,312			659,793		169,420			(829,193		)	1,287,332
TOTAL LIABILITIES AND EQUITY	$	3,389,810		$	3,543,813	$	214,504		$	(4,386,539	)	$	2,761,588

Condensed Consolidating Unaudited Statements of Operations

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	23		$	389,847		$	44,807		$	(23,287	)	$	411,390
Direct operating expense	—			273,188			32,637			(18,723		)	287,102
Depreciation and amortization expense	—			55,533			2,675			—			58,208
General and administrative expense	262			52,543			9,449			(4,518		)	57,736
Operating (loss) income	(239		)	8,583			46			(46		)	8,344
Interest expense, net of amounts capitalized	14,124			(155		)	15			—			13,984
Other expense (income), net	(911		)	(77		)	701			717			430
Income (loss) from continuing operations before taxes	(13,452		)	8,815			(670		)	(763		)	(6,070		)
Income tax benefit (expense)	(3,631		)	6,154			(225		)	—			2,298
Income (loss) from continuing operations	(17,083		)	14,969			(895		)	(763		)	(3,772		)
Discontinued operations	—			—			—			—			—
Net income (loss)	(17,083		)	14,969			(895		)	(763		)	(3,772		)
Income attributable to noncontrolling interest	—			—			356			—			356
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(17,083	)	$	14,969		$	(1,251	)	$	(763	)	$	(4,128	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	493,046		$	41,609		$	(18,658	)	$	515,997
Direct operating expense	—			331,139			28,908			(16,051		)	343,996
Depreciation and amortization expense	—			50,354			2,098			—			52,452
General and administrative expense	303			53,286			7,080			(2,588		)	58,081
Operating (loss) income	(303		)	58,267			3,523			(19		)	61,468
Interest expense, net of amounts capitalized	14,112			(385		)	3			—			13,730
Other expense (income), net	(895		)	75			(651		)	91			(1,380		)
Income (loss) from continuing operations before taxes	(13,520		)	58,577			4,171			(110		)	49,118
Income tax expense	(14,984		)	(1,376		)	(1,059		)	—			(17,419		)
Income (loss) from continuing operations	(28,504		)	57,201			3,112			(110		)	31,699
Discontinued operations	—			—			(2,454		)	—			(2,454		)
Net income (loss)	(28,504		)	57,201			658			(110		)	29,245
Income attributable to noncontrolling interest	—			—			204			—			204
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(28,504	)	$	57,201		$	454		$	(110	)	$	29,041

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	147		$	795,231		$	88,297		$	(43,836	)	$	839,839
Direct operating expense	—			559,230			63,120			(36,066		)	586,284
Depreciation and amortization expense	—			107,590			4,811			—			112,401
General and administrative expense	516			110,364			18,301			(8,200		)	120,981
Operating (loss) income	(369		)	18,047			2,065			430			20,173
Interest expense, net of amounts capitalized	28,015			(291		)	64			—			27,788
Other expense (income), net	(1,809		)	(1,246		)	738			1,524			(793		)
Income (loss) from continuing operations before taxes	(26,575		)	19,584			1,263			(1,094		)	(6,822		)
Income tax benefit (expense)	(2,383		)	5,271			(24		)	—			2,864
Income (loss) from continuing operations	(28,958		)	24,855			1,239			(1,094		)	(3,958		)
Discontinued operations	—			—			—			—			—
Net income (loss)	(28,958		)	24,855			1,239			(1,094		)	(3,958		)
Income attributable to noncontrolling interest	—			—			444			—			444
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(28,958	)	$	24,855		$	795		$	(1,094	)	$	(4,402	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	15		$	958,316		$	74,595		$	(30,178	)	$	1,002,748
Direct operating expense	—			626,776			53,691			(24,974		)	655,493
Depreciation and amortization expense	—			100,021			3,620			—			103,641
General and administrative expense	573			111,006			12,603			(5,183		)	118,999
Operating (loss) income	(558		)	120,513			4,681			(21		)	124,615
Interest expense, net of amounts capitalized	26,259			(658		)	11			—			25,612
Other expense (income), net	(1,506		)	657			(1,728		)	168			(2,409		)
Income (loss) from continuing operations before taxes	(25,311		)	120,514			6,398			(189		)	101,412
Income tax expense	(32,946		)	(1,581		)	(1,705		)	—			(36,232		)
Income (loss) from continuing operations	(58,257		)	118,933			4,693			(189		)	65,180
Discontinued operations	—			—			(33,359		)	—			(33,359		)
Net income (loss)	(58,257		)	118,933			(28,666		)	(189		)	31,821
Loss attributable to noncontrolling interest	—			—			(410		)	—			(410		)
INCOME (LOSS) ATTRIBUTABLE TO KEY	$	(58,257	)	$	118,933		$	(28,256	)	$	(189	)	$	32,231

Condensed Consolidating Unaudited Statements of Cash Flows

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2013
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	45,284		$	1,397		$	—		$	46,681
Cash flows from investing activities:
Capital expenditures	—			(69,413		)	(3,164		)	—			(72,577		)
Acquisition of the 50% noncontrolling interest in Geostream	—			(14,600		)	—			—			(14,600		)
Intercompany notes and accounts	—			36,539			—			(36,539		)	—
Other investing activities, net				3,881			—			—			3,881
Net cash used in investing activities	—			(43,593		)	(3,164		)	(36,539		)	(83,296		)
Cash flows from financing activities:
Repayment of capital lease obligations	—			(379		)	—			—			(379		)
Proceeds from borrowings on revolving credit facility	155,000			—			—			—			155,000
Repayments on revolving credit facility	(135,000		)	—			—			—			(135,000		)
Payment of deferred financing costs	(69		)	—			—			—			(69		)
Repurchases of common stock	(3,134		)	—			—			—			(3,134		)
Intercompany notes and accounts	(36,539		)	—			—			36,539			—
Other financing activities, net	(1,501		)	—			—			—			(1,501		)
Net cash provided by (used in) financing activities	(21,243		)	(379		)	—			36,539			14,917
Effect of changes in exchange rates on cash	—			—			484			—			484
Net increase (decrease) in cash and cash equivalents	(21,243		)	1,312			(1,283		)	—			(21,214		)
Cash and cash equivalents at beginning of period	39,617			1,601			4,731			—			45,949
Cash and cash equivalents at end of period	$	18,374		$	2,913		$	3,448		$	—		$	24,735

	Six Months Ended June 30, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	(24,658	)	$	210,219		$	6,291		$	—		$	191,852
Cash flows from investing activities:
Capital expenditures	—			(302,754		)	(6,574		)	—			(309,328		)
Intercompany notes and accounts	676			67,769			—			(68,445		)	—
Other investing activities, net	(676		)	9,225			—			—			8,549
Net cash used in investing activities	—			(225,760		)	(6,574		)	(68,445		)	(300,779		)
Cash flows from financing activities:
Proceeds from long-term debt	205,000						—			—			205,000
Repayment of capital lease obligations	—			(1,007		)	—			—			(1,007		)
Proceeds from borrowings on revolving credit facility	195,000			—			—			—			195,000
Repayments on revolving credit facility	(300,000		)	—			—			—			(300,000		)
Payment of deferred financing costs	(4,534		)	—			—			—			(4,534		)
Repurchases of common stock	(7,417		)	—			—			—			(7,417		)
Intercompany notes and accounts	(67,769		)	(676		)	—			68,445			—
Other financing activities, net	4,859			10,914			1,687			—			17,460
Net cash provided by financing activities	25,139			9,231			1,687			68,445			104,502
Effect of changes in exchange rates on cash	—			—			(2,738		)	—			(2,738		)
Net increase (decrease) in cash and cash equivalents	481			(6,310		)	(1,334		)	—			(7,163		)
Cash and cash equivalents at beginning of period	21,673			7,985			5,785			—			35,443
Cash and cash equivalents at end of period	$	22,154		$	1,675		$	4,451		$	—		$	28,280

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Accounting Standards Not Yet Adopted in this Report

Accounting Standards Adopted or Not Yet Adopted in this Report

There are no new accounting standards that have been adopted or not yet adopted in this report.

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SEVERANCE, CONTRACT TERMINATION AND MOBILIZATION COSTS (Tables)

6 Months Ended

Jun. 30, 2013

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost by Segment

Presented below are the schedules of the activities for the liabilities recorded in connection with our restructuring by segments and in consolidation:

	Severance			Lease Cancellation Fees			Mobilization Costs			Total
	(in thousands)
U.S.
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	746			1,630			218			2,594
Payment	(724		)	—			—			(724		)
Balance as of June 30, 2013	$	22		$	1,630		$	218		$	1,870
International
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	4,843			307			2,077			7,227
Payment	(4,533		)	(307		)	$	(1,054	)	(5,894		)
Balance as of June 30, 2013	$	310		$	—		$	1,023		$	1,333
Functional Support
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	732			—			—			732
Payment	(732		)	—			—			(732		)
Balance as of June 30, 2013	$	—		$	—		$	—		$	—
Consolidated
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	6,321			1,937			2,295			10,553
Payment	(5,989		)	(307		)	(1,054		)	(7,350		)
Balance as of June 30, 2013	$	332		$	1,630		$	1,241		$	3,203

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Balance Sheets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Assets:
Current assets	$ 619,867	$ 589,794
Property and equipment, net	1,394,593	1,436,674
Goodwill	624,858	626,481
Deferred financing costs, net	15,301	16,628
Other assets	77,818	92,011
TOTAL ASSETS	2,732,437	2,761,588	2,790,320
LIABILITIES AND EQUITY
Current liabilities	265,017	305,096
Long-term debt and capital leases, less current portion	867,832	848,110
Deferred tax liabilities	269,025	259,453
Other long-term liabilities	60,911	61,597
Equity	1,269,652	1,287,332	1,248,811	1,214,631
TOTAL LIABILITIES AND EQUITY	2,732,437	2,761,588
Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	0	0
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	0	0
Parent Company
Assets:
Current assets	51,099	66,435
Property and equipment, net	0	0
Goodwill	0	0
Deferred financing costs, net	15,301	16,628
Other assets	4,082	8,068
TOTAL ASSETS	3,533,529	3,389,810
LIABILITIES AND EQUITY
Current liabilities	23,013	46,632
Long-term debt and capital leases, less current portion	867,832	848,110
Deferred tax liabilities	262,722	258,528
Other long-term liabilities	1,548	1,528
Equity	1,269,634	1,287,312
TOTAL LIABILITIES AND EQUITY	3,533,529	3,389,810
Parent Company | Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	3,463,047	3,298,679
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	1,108,780	947,700
Guarantor Subsidiaries
Assets:
Current assets	510,280	469,049
Property and equipment, net	1,288,438	1,329,379
Goodwill	597,458	597,458
Deferred financing costs, net	0	0
Other assets	31,664	39,696
TOTAL ASSETS	3,631,309	3,543,813
LIABILITIES AND EQUITY
Current liabilities	215,451	226,773
Long-term debt and capital leases, less current portion	0	0
Deferred tax liabilities	6,781	6,781
Other long-term liabilities	59,216	60,068
Equity	709,753	659,793
TOTAL LIABILITIES AND EQUITY	3,631,309	3,543,813
Guarantor Subsidiaries | Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	1,203,469	1,108,231
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	2,640,108	2,590,398
Non-Guarantor Subsidiaries
Assets:
Current assets	58,488	54,310
Property and equipment, net	106,155	107,295
Goodwill	27,400	29,023
Deferred financing costs, net	0	0
Other assets	42,072	44,247
TOTAL ASSETS	229,613	214,504
LIABILITIES AND EQUITY
Current liabilities	26,553	31,691
Long-term debt and capital leases, less current portion	0	0
Deferred tax liabilities	(478)	(746)
Other long-term liabilities	147	1
Equity	150,790	169,420
TOTAL LIABILITIES AND EQUITY	229,613	214,504
Non-Guarantor Subsidiaries | Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	(4,502)	(20,371)
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	52,601	14,138
Eliminations
Assets:
Current assets	0	0
Property and equipment, net	0	0
Goodwill	0	0
Deferred financing costs, net	0	0
Other assets	0	0
TOTAL ASSETS	(4,662,014)	(4,386,539)
LIABILITIES AND EQUITY
Current liabilities	0	0
Long-term debt and capital leases, less current portion	0	0
Deferred tax liabilities	0	(5,110)
Other long-term liabilities	0	0
Equity	(860,525)	(829,193)
TOTAL LIABILITIES AND EQUITY	(4,662,014)	(4,386,539)
Eliminations | Intercompany
Assets:
Intercompany notes and accounts receivable and investment in subsidiaries	(4,662,014)	(4,386,539)
LIABILITIES AND EQUITY
Intercompany notes and accounts payable	$ (3,801,489)	$ (3,552,236)

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The components of our earnings (loss) per share are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(in thousands, except per share amounts)
Basic EPS Calculation:
Numerator
Income (loss) from continuing operations attributable to Key	$	(4,128	)	$	31,495		$	(4,402	)	$	65,590
Loss from discontinued operations, net of tax	—			(2,454		)	—			(33,359		)
Income (loss) attributable to Key	$	(4,128	)	$	29,041		$	(4,402	)	$	32,231
Denominator
Weighted average shares outstanding	152,384			151,087			152,175			151,110
Basic earnings (loss) per share from continuing operations attributable to Key	$	(0.03	)	$	0.21		$	(0.03	)	$	0.43
Basic loss per share from discontinued operations	—			(0.02		)	—			(0.22		)
Basic earnings (loss) per share attributable to Key	$	(0.03	)	$	0.19		$	(0.03	)	$	0.21
Diluted EPS Calculation:
Numerator
Income (loss) from continuing operations attributable to Key	$	(4,128	)	$	31,495		$	(4,402	)	$	65,590
Loss from discontinued operations, net of tax	—			(2,454		)	—			(33,359		)
Income (loss) attributable to Key	$	(4,128	)	$	29,041		$	(4,402	)	$	32,231
Denominator
Weighted average shares outstanding	152,384			151,087			152,175			151,110
Stock options	—			13			—			58
Total	152,384			151,100			152,175			151,168
Diluted earnings (loss) per share from continuing operations attributable to Key	$	(0.03	)	$	0.21		$	(0.03	)	$	0.43
Diluted loss per share from discontinued operations	—			(0.02		)	—			(0.22		)
Diluted earnings (loss) per share attributable to Key	$	(0.03	)	$	0.19		$	(0.03	)	$	0.21

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SEGMENT INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012		Dec. 31, 2012
Segment Reporting Information [Line Items]
Revenues from external customers	$ 411,390		$ 515,997		$ 839,839		$ 1,002,748
Intersegment revenues	0		0		0		0
Depreciation and amortization	58,208		52,452		112,401		103,641
Other operating expenses	344,838		402,077		707,265		774,492
Operating income (loss)	8,344		61,468		20,173		124,615
Interest expense, net of amounts capitalized	13,984		13,730		27,788		25,612
Income (loss) from continuing operations before tax	(6,070)		49,118		(6,822)		101,412
Long-lived assets	2,112,570	[1]	2,173,295	[1]	2,112,570	[1]	2,173,295	[1]
Total assets	2,732,437		2,790,320		2,732,437		2,790,320		2,761,588
Capital expenditures, excluding acquisitions	35,433		139,890		72,577		309,328
U.S.
Segment Reporting Information [Line Items]
Revenues from external customers	361,698		431,646		707,770		856,619
Intersegment revenues	(139)		0		8,462		0
Depreciation and amortization	47,484		44,838		92,274		89,189
Other operating expenses	259,121		304,311		522,128		593,475
Operating income (loss)	55,093		82,497		93,368		173,955
Interest expense, net of amounts capitalized	0		4		1		12
Income (loss) from continuing operations before tax	55,210		82,530		93,419		174,082
Long-lived assets	1,671,666	[1]	1,907,653	[1]	1,671,666	[1]	1,907,653	[1]
Total assets	2,654,754		2,591,329		2,654,754		2,591,329
Capital expenditures, excluding acquisitions	26,659		85,406		49,969		164,816
International
Segment Reporting Information [Line Items]
Revenues from external customers	49,692		84,351		132,069		146,129
Intersegment revenues	2,676		1,195		4,195		2,152
Depreciation and amortization	7,463		4,526		13,963		8,473
Other operating expenses	53,235		63,709		117,238		111,172
Operating income (loss)	(11,006)		16,116		868		26,484
Interest expense, net of amounts capitalized	15		1		64		14
Income (loss) from continuing operations before tax	(11,762)		17,073		1,294		28,300
Long-lived assets	333,096	[1]	308,497	[1]	333,096	[1]	308,497	[1]
Total assets	556,325		502,735		556,325		502,735
Capital expenditures, excluding acquisitions	2,196		39,321		13,163		124,777
Functional Support
Segment Reporting Information [Line Items]
Revenues from external customers	0	[2]	0	[2]	0	[2]	0	[2]
Intersegment revenues	23	[2]	0	[2]	147	[2]	15	[2]
Depreciation and amortization	3,261	[2]	3,088	[2]	6,164	[2]	5,979	[2]
Other operating expenses	32,482	[2]	34,057	[2]	67,899	[2]	69,845	[2]
Operating income (loss)	(35,743)	[2]	(37,145)	[2]	(74,063)	[2]	(75,824)	[2]
Interest expense, net of amounts capitalized	13,969	[2]	13,725	[2]	27,723	[2]	25,586	[2]
Income (loss) from continuing operations before tax	(49,518)	[2]	(50,485)	[2]	(101,535)	[2]	(100,970)	[2]
Long-lived assets	292,818	[1],[2]	301,454	[1],[2]	292,818	[1],[2]	301,454	[1],[2]
Total assets	23,035	[2]	408,233	[2]	23,035	[2]	408,233	[2]
Capital expenditures, excluding acquisitions	6,578	[2]	15,163	[2]	9,445	[2]	19,735	[2]
Reconciling Eliminations
Segment Reporting Information [Line Items]
Revenues from external customers	0		0		0		0
Intersegment revenues	(2,560)		(1,195)		(12,804)		(2,167)
Depreciation and amortization	0		0		0		0
Other operating expenses	0		0		0		0
Operating income (loss)	0		0		0		0
Interest expense, net of amounts capitalized	0		0		0		0
Income (loss) from continuing operations before tax	0		0		0		0
Long-lived assets	(185,010)	[1]	(344,309)	[1]	(185,010)	[1]	(344,309)	[1]
Total assets	(501,677)		(711,977)		(501,677)		(711,977)
Capital expenditures, excluding acquisitions	$ 0		$ 0		$ 0		$ 0

[1] Long lived assets include: fixed assets, goodwill, intangibles and other assets

[2] Functional Support is geographically located in the United States.

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LONG-TERM DEBT - Schedule of Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Senior Secured Credit Facility revolving loans due 2016	$ 185,000	$ 165,000
Net unamortized premium on debt	4,259	4,537
Capital lease obligations	13	393
Total debt	867,845	848,503
Less current portion	(13)	(393)
Long-term debt and capital leases	867,832	848,110
Senior Notes 6.75 Percent Due 2021
Debt Instrument [Line Items]
Senior Notes	675,000	675,000
Senior Notes 8.375 Percent Due 2014
Debt Instrument [Line Items]
Senior Notes	$ 3,573	$ 3,573

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OTHER BALANCE SHEET INFORMATION - Other Noncurrent Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Other non-current liabilities:
Asset retirement obligations	$ 11,866	$ 11,659
Environmental liabilities	6,530	4,539
Accrued rent	1,140	1,424
Accrued sales, use and other taxes	7,155	6,952
Other	1,331	3,347
Total	$ 28,022	$ 27,921

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EQUITY AND NONCONTROLLING INTEREST (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Apr. 09, 2013	Oct. 31, 2008
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period (in shares)			151,069,609
Balance at beginning of period			$ 1,287,332	$ 1,214,631
Foreign currency translation	(3,848)	(9,573)	(5,366)	(2,521)
Common stock purchases			(3,134)	(7,417)
Share-based compensation			9,393	8,444
Exercise of stock options and warrants				812
Tax benefits from share-based compensation			(1,501)	4,047
Acquisition of the 50% noncontrolling interest in Geostream (Note 3)			(13,114)
Shares surrendered				(1,006)
Net income (loss)	(3,772)	29,245	(3,958)	31,821
Balance at end of period (in shares)	152,443,492		152,443,492
Balance at end of period	1,269,652	1,248,811	1,269,652	1,248,811
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period (in shares)			151,070,000	150,733,000
Balance at beginning of period			15,108	15,073
Common stock purchases (in shares)			(410,000)	(468,000)
Common stock purchases			(42)	(47)
Share-based compensation (in shares)			1,783,000	855,000
Share-based compensation			178	86
Exercise of stock options and warrants (in shares)				89,000
Exercise of stock options and warrants				9
Shares surrendered (in shares)				(68,000)
Shares surrendered				(7)
Balance at end of period (in shares)	152,443,000	151,141,000	152,443,000	151,141,000
Balance at end of period	15,244	15,114	15,244	15,114
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period			925,132	915,400
Common stock purchases			(3,092)	(7,370)
Share-based compensation			9,215	8,358
Exercise of stock options and warrants				803
Tax benefits from share-based compensation			(1,501)	4,047
Acquisition of the 50% noncontrolling interest in Geostream (Note 3)			22,432
Shares surrendered				(999)
Balance at end of period	952,186	920,239	952,186	920,239
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period			(6,148)	(58,231)
Foreign currency translation			(4,699)	(1,393)
Acquisition of the 50% noncontrolling interest in Geostream (Note 3)			(4,350)
Balance at end of period	(15,197)	(59,624)	(15,197)	(59,624)
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period			319,736	312,114
Net income (loss)			(4,402)	32,231
Balance at end of period	315,334	344,345	315,334	344,345
Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period			33,504	30,275
Foreign currency translation			(667)	(1,128)
Acquisition of the 50% noncontrolling interest in Geostream (Note 3)			(31,196)
Net income (loss)			444	(410)
Balance at end of period	2,085	28,737	2,085	28,737
Geostream
Schedule of Equity Component [Line Items]
Percentage of noncontrolling interest acquired	50.00%		50.00%		50.00%	26.00%
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Acquisition of the 50% noncontrolling interest in Geostream (Note 3)	$ 22,432	$ 0	$ 22,432	$ 0

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 3,903	$ 2,860
Common stock, shares issued	152,443,492	151,069,609
Common stock, shares outstanding	152,443,492	151,069,609
Common stock, par value (in usd per share)	$ 0.10	$ 0.10
Common stock, shares authorized	200,000,000	200,000,000

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SEVERANCE, CONTRACT TERMINATION AND MOBILIZATION COSTS SEVERANCE, CONTRACT TERMINATION AND MOBILIZATION COSTS

6 Months Ended

Jun. 30, 2013

Restructuring and Related Activities [Abstract]

SEVERANCE, CONTRACT TERMINATION AND MOBILIZATION COSTS

SEVERANCE, CONTRACT TERMINATION AND MOBILIZATION COSTS

In the second quarter of 2013, we implemented a significant restructuring of our Fluid Management Service business and our corporate cost structure to better align them with current market conditions. As a result of this restructuring implementation, we recognized approximately $6.3 million of severance expenses in the second quarter of 2013. The severance costs were based on obligations under our existing benefit plans. Furthermore, we recognized lease cancellation fees of $1.9 million primarily related to our Fluid Management Services business. Additionally, in our international business, due to customer spending reductions in Mexico, we began redeploying idle rigs from the North Region of Mexico to higher demand markets. This redeployment included seven rigs resulting in a total equipment mobilization cost of $2.3 million. These costs are reflected in our consolidated statements of operations and include $8.3 million of Direct operating expenses and $2.2 million of General and administrative expenses. On a segment basis, $2.6 million is associated with our U.S. operations, $7.2 million is associated with our international operations and the remaining $0.7 million is associated with our Functional Support segment. We expect the accrued severance of $0.3 million, the accrued lease cancellation fees of $1.6 million, and the accrued mobilization costs of $1.2 million as of June 30, 2013 to be paid in the second half of 2013. The restructuring activities were implemented in the second quarter of 2013 and are expected to be completed by the end of 2013.

Presented below are the schedules of the activities for the liabilities recorded in connection with our restructuring by segments and in consolidation:

	Severance			Lease Cancellation Fees			Mobilization Costs			Total
	(in thousands)
U.S.
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	746			1,630			218			2,594
Payment	(724		)	—			—			(724		)
Balance as of June 30, 2013	$	22		$	1,630		$	218		$	1,870
International
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	4,843			307			2,077			7,227
Payment	(4,533		)	(307		)	$	(1,054	)	(5,894		)
Balance as of June 30, 2013	$	310		$	—		$	1,023		$	1,333
Functional Support
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	732			—			—			732
Payment	(732		)	—			—			(732		)
Balance as of June 30, 2013	$	—		$	—		$	—		$	—
Consolidated
Balance as of December 31, 2012	$	—		$	—		$	—		$	—
Expense	6,321			1,937			2,295			10,553
Payment	(5,989		)	(307		)	(1,054		)	(7,350		)
Balance as of June 30, 2013	$	332		$	1,630		$	1,241		$	3,203

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Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Discontinued operations, tax benefit	$ 0	$ 1,501	$ 0	$ 17,855

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LONG-TERM DEBT - Senior Secured Credit Facility (Details) (USD $)	6 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended		15 Months Ended										6 Months Ended
	Jun. 30, 2013 At End Of Each Fiscal Quarter Thereafter	Jun. 30, 2013 Amendment Of Credit Facility	Jun. 30, 2013 2011 Credit Facility	Jun. 30, 2012 2011 Credit Facility	Jun. 30, 2013 2011 Credit Facility	Jun. 30, 2012 2011 Credit Facility	Dec. 31, 2011 2011 Credit Facility	Dec. 31, 2012 2011 Credit Facility	Jun. 30, 2013 2011 Credit Facility Maximum	Jun. 30, 2013 2011 Credit Facility Minimum	Sep. 30, 2012 2011 Credit Facility Foreign Subsidiaries	Sep. 30, 2012 2011 Credit Facility Foreign Subsidiaries Minimum	Jun. 30, 2013 2011 Credit Facility Acquisition Covenants Maximum	Jun. 30, 2013 2011 Credit Facility Acquisition Covenants Minimum	Jun. 30, 2013 2011 Credit Facility Revolving Credit Facility	Jun. 30, 2013 2011 Credit Facility Letter of Credit	Dec. 31, 2012 2011 Credit Facility LIBOR Maximum	Dec. 31, 2012 2011 Credit Facility LIBOR Minimum	Dec. 31, 2012 2011 Credit Facility Other Loans Maximum	Dec. 31, 2012 2011 Credit Facility Other Loans Minimum	Jun. 30, 2013 2011 Credit Facility Amendment Of Credit Facility	Jul. 27, 2011 2011 Credit Facility Amendment Of Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity																						$ 550,000,000
Line of credit, expiration date																					Mar. 31, 2016
Increase in total commitments									100,000,000.0
Capitalized finance costs		1,400,000	4,900,000		4,900,000
Line of credit, interest rate basis points																	3.00%	2.25%	2.00%	1.25%
Interest coverage ratio										3.00
Additional interest rate above Federal Funds rate							0.50%
Additional interest rate above one-month adjusted LIBOR							1.00%
Commitment fee minimum								0.50%
Consolidated funded indebtedness to total capitalization ratio									0.45
Leverage ratio									2.00				4.00	1.00
Debt instrument covenant annual capital expenditures											250,000,000
Coverage ratio	2.00											3.00
Line of credit, remaining borrowing capacity			310,900,000		310,900,000									25,000,000
Line of credit, amount outstanding															$ 185,000,000	$ 54,100,000
Line of credit, weighted average interest rate			2.67%	2.70%	2.68%	2.70%
Line of credit, covenant terms					the amended 2011 Credit Facility contains certain affirmative and negative covenants, including, without limitation, restrictions on (i) liens; (ii) debt, guarantees and other contingent obligations; (iii) mergers and consolidations; (iv) sales, transfers and other dispositions of property or assets; (v) loans, acquisitions, joint ventures and other investments (with acquisitions permitted so long as, after giving pro forma effect thereto, no default or event of default exists under the 2011 Credit Facility, the pro forma consolidated total leverage ratio does not exceed 4.00 to 1.00, we are in compliance with other financial covenants and we have at least $25.0 million of availability under the 2011 Credit Facility); (vi) dividends and other distributions to, and redemptions and repurchases from, equityholders; (vii) making investments, loans or advances; (viii) selling properties; (ix) prepaying, redeeming or repurchasing subordinated (contractually or structurally) debt; (x) engaging in transactions with affiliates; (xi) entering into hedging arrangements; (xii) entering into sale and leaseback transactions; (xiii) granting negative pledges other than to the lenders; (xiv) changes in the nature of business; (xv) amending organizational documents; and (xvi) changes in accounting policies or reporting practices; in each of the foregoing cases, with certain exceptions.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 24,735	$ 45,949
Accounts receivable, net of allowance for doubtful accounts of $3,903 and $2,860, respectively	433,136	404,390
Inventories	39,860	38,622
Other current assets	122,136	100,833
Total current assets	619,867	589,794
Property and equipment	2,575,041	2,528,578
Accumulated depreciation	(1,180,448)	(1,091,904)
Property and equipment, net	1,394,593	1,436,674
Goodwill	624,858	626,481
Other intangible assets, net	50,516	60,905
Deferred financing costs, net	15,301	16,628
Deposits	8,131	7,339
Equity method investments	947	966
Other assets	18,224	22,801
TOTAL ASSETS	2,732,437	2,761,588
Current liabilities:
Accounts payable	90,272	104,073
Other current liabilities	174,732	200,630
Current portion of capital leases	13	393
Total current liabilities	265,017	305,096
Long-term debt	867,832	848,110
Workers' compensation, vehicular and health insurance liabilities	32,889	33,676
Deferred tax liabilities	269,025	259,453
Other non-current liabilities	28,022	27,921
Commitments and contingencies
Equity:
Common stock, $0.10 par value; 200,000,000 shares authorized, 152,443,492 and 151,069,609 shares issued and outstanding	15,244	15,108
Additional paid-in capital	952,186	925,132
Accumulated other comprehensive loss	(15,197)	(6,148)
Retained earnings	315,334	319,736
Total equity attributable to Key	1,267,567	1,253,828
Noncontrolling interest	2,085	33,504
Total equity	1,269,652	1,287,332
TOTAL LIABILITIES AND EQUITY	$ 2,732,437	$ 2,761,588

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GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Amount of Goodwill (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Goodwill [Roll Forward]
12/31/2012	$ 626,481
Impact of foreign currency translation	(1,623)
June 30, 2013	624,858
U.S.
Goodwill [Roll Forward]
12/31/2012	597,456
Impact of foreign currency translation	0
June 30, 2013	597,456
International
Goodwill [Roll Forward]
12/31/2012	29,025
Impact of foreign currency translation	(1,623)
June 30, 2013	$ 27,402

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ACQUISITION OF NONCONTROLLING INTEREST IN GEOSTREAM (Tables)

6 Months Ended

Jun. 30, 2013

Noncontrolling Interest [Abstract]

Effects of Changes in Ownership Interest

The effects of changes in our ownership interest in Geostream were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013			2012
	(in thousands)
Net Income (loss) attributable to Key	$	(4,128	)	$	29,041	$	(4,402	)	$	32,231
Transfers from the noncontrolling interest
Increase in Key's paid-in capital for purchase of the 50% noncontrolling interest in Geostream	22,432			—		22,432			—
Net transfers from noncontrolling interest	22,432			—		22,432			—
Change from net income (loss) attributable to Key and transfers from noncontrolling interest	$	18,304		$	29,041	$	18,030		$	32,231

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TRANSACTIONS WITH RELATED PARTIES

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

TRANSACTIONS WITH RELATED PARTIES

TRANSACTIONS WITH RELATED PARTIES

Employee Loans and Advances

From time to time, we have made certain retention loans and relocation loans to employees other than executive officers. The retention loans are forgiven over various time periods, so long as the employees continue their employment with us. The relocation loans are repaid upon the employees selling their prior residence. As of June 30, 2013 and December 31, 2012, we did not have any employee loans or advances outstanding.

Board of Director Relationships

A member of our board of directors is the Senior Vice President, General Counsel and Chief Administrative Officer of Anadarko Petroleum Corporation (“Anadarko”), which is one of our customers. Sales to Anadarko were approximately $7.6 million and $12.4 million for the three-month periods endedJune 30, 2013 and 2012, respectively, and $14.2 million and $23.8 million for the six months endedJune 30, 2013 and 2012, respectively. Receivables outstanding from Anadarko were approximately $4.2 million and $3.5 million as of June 30, 2013 and December 31, 2012, respectively. Transactions with Anadarko for our services are made on terms consistent with other customers.

A member of our board of directors serves on the United States Advisory Board of the Alexander Proudfoot practice of Management Consulting Group PLC (“Proudfoot”), which provided consulting services to us related to our general and administrative cost restructuring initiative. There were no payments made to Proudfoot during the three or six months ended June 30, 2013. Payments to Proudfoot were zero and $1.9 million for the three and six months ended June 30, 2012, respectively.

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DISCONTINUED OPERATIONS - Results of Operations (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Discontinued Operations and Disposal Groups [Abstract]
REVENUES	$ 55,789	$ 30,150
COSTS AND EXPENSES:
Direct operating expenses	54,542	28,237
Depreciation and amortization expense	143	0
General and administrative expenses	8,476	4,366
Impairment and other charges	41,457	0
Operating loss	(48,829)	(2,453)
Interest expense, net of amounts capitalized	137	86
Other expense, net	2,248	1,416
Loss before tax	(51,214)	(3,955)
Income tax benefit	17,855	1,501
Loss from discontinued operations	$ (33,359)	$ (2,454)

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Indefinite-lived trade names	$ 13.2		$ 13.2
Amortization of intangible assets	$ 4.9	$ 5.8	$ 9.7	$ 11.6

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SHARE-BASED COMPENSATION - Number of Performance Units Earned Based on Relative Placement of Total Stockholder Return for Period Within Peer Group (Details)	6 Months Ended
	Jun. 30, 2013
First
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	100.00%
Performance Units Earned as a Percentage of Target	200.00%
Second
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	91.00%
Performance Units Earned as a Percentage of Target	180.00%
Third
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	82.00%
Performance Units Earned as a Percentage of Target	160.00%
Fourth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	73.00%
Performance Units Earned as a Percentage of Target	140.00%
Fifth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	64.00%
Performance Units Earned as a Percentage of Target	120.00%
Sixth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	55.00%
Performance Units Earned as a Percentage of Target	100.00%
Seventh
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	45.00%
Performance Units Earned as a Percentage of Target	75.00%
Eighth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	36.00%
Performance Units Earned as a Percentage of Target	50.00%
Ninth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	27.00%
Performance Units Earned as a Percentage of Target	25.00%
Tenth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	18.00%
Performance Units Earned as a Percentage of Target	0.00%
Eleventh
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	9.00%
Performance Units Earned as a Percentage of Target	0.00%
Twelfth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentile Ranking in Peer Group	0.00%
Performance Units Earned as a Percentage of Target	0.00%

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Carrying Amounts and Estimated Fair Values of Financial Instruments

The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of June 30, 2013 and December 31, 2012.

Cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet date.

	June 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	12,955		12,955		12,955		12,955
Financial liabilities:
6.75% Senior Notes	$	675,000	$	663,188	$	675,000	$	680,510
8.375% Senior Notes	3,573		3,637		3,573		3,656
Credit Facility revolving loans	185,000		185,000		165,000		165,000

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LONG-TERM DEBT (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Long-Term Debt

As of June 30, 2013 and December 31, 2012, the components of our long-term debt were as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
6.75% Senior Notes due 2021	$	675,000		$	675,000
8.375% Senior Notes due 2014	3,573			3,573
Senior Secured Credit Facility revolving loans due 2016	185,000			165,000
Net unamortized premium on debt	4,259			4,537
Capital lease obligations	13			393
Total debt	867,845			848,503
Less current portion	(13		)	(393		)
Long-term debt and capital leases	$	867,832		$	848,110

Redemption Prices (Expressed as Percentages of the Principal Amount Redeemed)

On or after March 1, 2016, the 2021 Notes will be subject to redemption at any time and from time to time at our option, in whole or in part, at the redemption prices below (expressed as percentages of the principal amount redeemed), plus accrued and unpaid interest to the applicable redemption date, if redeemed during the twelve-month period beginning on March 1 of the years indicated below:

Year	Percentage
2016	103.375	%
2017	102.250	%
2018	101.125	%
2019 and thereafter	100.000	%

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OTHER INCOME, NET (Tables)

6 Months Ended

Jun. 30, 2013

Other Income and Expenses [Abstract]

Other Income and Expense

The table below presents comparative detailed information about our other income and expense, shown on the condensed consolidated statements of operations as “Other (income) loss, net” for the periods indicated:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)
Interest income	$	(84	)	$	(7	)	$	(95	)	$	(14	)
Foreign exchange (gain) loss	1,398			(766		)	473			(1,705		)
Other income, net	(884		)	(607		)	(1,171		)	(690		)
Total	$	430		$	(1,380	)	$	(793	)	$	(2,409	)

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EQUITY AND NONCONTROLLING INTEREST EQUITY AND NONCONTROLLING INTEREST

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

EQUITY AND NONCONTROLLING INTEREST

EQUITY AND NONCONTROLLING INTEREST

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2013 is as follows :

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2012	151,070		$	15,108		$	925,132		$	(6,148	)	$	319,736		$	33,504		$	1,287,332
Foreign currency translation	—		—			—			(4,699		)	—			(667		)	(5,366		)
Common stock purchases	(410	)	(42		)	(3,092		)	—						—			(3,134		)
Share-based compensation	1,783		178			9,215			—			—			—			9,393
Tax benefits from share-based compensation	—		—			(1,501		)	—			—			—			(1,501		)
Acquisition of the 50% noncontrolling interest in Geostream (Note 3)	—		—			22,432			(4,350		)	—			(31,196		)	(13,114		)
Net income (loss)	—		—			—			—			(4,402		)	444			(3,958		)
BALANCE AT JUNE 30, 2013	152,443		$	15,244		$	952,186		$	(15,197	)	$	315,334		$	2,085		$	1,269,652

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2012 is as follows :

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Noncontrolling Interest			Total
	Number of Shares		Amount at Par
	(in thousands)
BALANCE AT DECEMBER 31, 2011	150,733		$	15,073		$	915,400		$	(58,231	)	$	312,114	$	30,275		$	1,214,631
Foreign currency translation	—		—			—			(1,393		)	—		(1,128		)	(2,521		)
Common stock purchases	(468	)	(47		)	(7,370		)	—			—		—			(7,417		)
Exercise of stock options and warrants	89		9			803			—			—		—			812
Share-based compensation	855		86			8,358			—			—		—			8,444
Tax benefits from share-based compensation	—		—			4,047			—			—		—			4,047
Shares surrendered	(68	)	(7		)	(999		)	—			—		—			(1,006		)
Net income (loss)	—		—			—			—			32,231		(410		)	31,821
BALANCE AT JUNE 30, 2012	151,141		$	15,114		$	920,239		$	(59,624	)	$	344,345	$	28,737		$	1,248,811

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Numerator
Income (loss) from continuing operations attributable to Key	$ (4,128)	$ 31,495	$ (4,402)	$ 65,590
Discontinued operations	0	(2,454)	0	(33,359)
Loss from discontinued operations, net of tax	0	(2,454)	0	(33,359)
INCOME (LOSS) ATTRIBUTABLE TO KEY	(4,128)	29,041	(4,402)	32,231
Denominator
Weighted average shares outstanding	152,384	151,087	152,175	151,110
Basic earnings (loss) per share from continuing operations attributable to Key	$ (0.03)	$ 0.21	$ (0.03)	$ 0.43
Basic loss per share from discontinued operations	$ 0.00	$ (0.02)	$ 0.00	$ (0.22)
Basic earnings (loss) per share attributable to Key	$ (0.03)	$ 0.19	$ (0.03)	$ 0.21
Numerator
Income (loss) from continuing operations attributable to Key	(4,128)	31,495	(4,402)	65,590
Loss from discontinued operations, net of tax	0	(2,454)	0	(33,359)
INCOME (LOSS) ATTRIBUTABLE TO KEY	$ (4,128)	$ 29,041	$ (4,402)	$ 32,231
Denominator
Weighted average shares outstanding	152,384	151,087	152,175	151,110
Total	152,384	151,100	152,175	151,168
Diluted earnings (loss) per share from continuing operations attributable to Key	$ (0.03)	$ 0.21	$ (0.03)	$ 0.43
Diluted loss per share from discontinued operations	$ 0.00	$ (0.02)	$ 0.00	$ (0.22)
Diluted earnings (loss) per share attributable to Key	$ (0.03)	$ 0.19	$ (0.03)	$ 0.21
Stock Options
Denominator
Stock rights	0	13	0	58

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DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Results of Operations

The following table presents the results of operations for the Argentina business sold in this transaction for the three and six months endedJune 30, 2012.

	Three Months Ended			Six Months Ended
	June 30, 2012			June 30, 2012
	(in thousands)
REVENUES	$	30,150		$	55,789
COSTS AND EXPENSES:
Direct operating expenses	28,237			54,542
Depreciation and amortization expense	—			143
General and administrative expenses	4,366			8,476
Impairment and other charges	—			41,457
Operating loss	(2,453		)	(48,829		)
Interest expense, net of amounts capitalized	86			137
Other expense, net	1,416			2,248
Loss before tax	(3,955		)	(51,214		)
Income tax benefit	1,501			17,855
Loss from discontinued operations	$	(2,454	)	$	(33,359	)

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ACQUISITION OF NONCONTROLLING INTEREST IN GEOSTREAM (Details) (USD $)	3 Months Ended		6 Months Ended		10 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Sep. 01, 2009	Apr. 09, 2013	Oct. 31, 2008
Noncontrolling Interest [Line Items]
Net Income (loss) attributable to Key	$ (4,128,000)	$ 29,041,000	$ (4,402,000)	$ 32,231,000
Increase in Key's paid-in capital for purchase of the 50% non controlling interest in Geostream			(13,114,000)
Net transfers from noncontrolling interest	22,432,000	0	22,432,000	0
Change from net income (loss) attributable to Key and transfers from noncontrolling interest	18,304,000	29,041,000	18,030,000	32,231,000
Geostream
Noncontrolling Interest [Line Items]
Percentage of acquired interest	50.00%		50.00%			50.00%	26.00%
Aggregate cost of acquired interest						14,600,000	17,400,000
Business combination, percentage of voting interests acquired					24.00%
Business combination, cost of acquired interest					16,400,000
Total controlling interest, percentage					50.00%
Increase in Key's paid-in capital for purchase of the 50% non controlling interest in Geostream	$ 22,432,000	$ 0	$ 22,432,000	$ 0

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months endedJune 30, 2013 are as follows:

	U.S.		International			Total
	(in thousands)
December 31, 2012	$	597,456	$	29,025		$	626,481
Impact of foreign currency translation	—		(1,623		)	(1,623		)
June 30, 2013	$	597,456	$	27,402		$	624,858

The components of our other intangible assets as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
Noncompete agreements:
Gross carrying value	$	7,134		$	9,332
Accumulated amortization	(4,927		)	(5,022		)
Net carrying value	$	2,207		$	4,310
Patents, trademarks and tradename:
Gross carrying value	$	14,044		$	14,689
Accumulated amortization	(473		)	(410		)
Net carrying value	$	13,571		$	14,279
Customer relationships and contracts:
Gross carrying value	$	100,256		$	100,481
Accumulated amortization	(70,446		)	(62,143		)
Net carrying value	$	29,810		$	38,338
Developed technology:
Gross carrying value	$	9,780		$	7,583
Accumulated amortization	(4,852		)	(3,605		)
Net carrying value	$	4,928		$	3,978
Customer Backlog:
Gross carrying value	$	776		$	779
Accumulated amortization	(776		)	(779		)
Net carrying value	$	—		$	—

Of our intangible assets at June 30, 2013, $13.2 million is an indefinite-lived tradename and not subject to amortization. The weighted average remaining amortization periods and expected amortization expense for the next five years for our definite lived intangible assets are as follows:

	Weighted average remaining amortization period (years)	Expected Amortization Expense
		Remainder of 2013		2014		2015		2016		2017		2018
		(in thousands)
Noncompete agreements	1.3	$	869	$	1,338	$	—	$	—	$	—	$	—
Patents and trademarks	4.9	63		119		55		40		40		17
Customer relationships and contracts	6.6	8,477		7,952		5,090		3,439		2,368		1,120
Developed technology	17.5	282		553		505		428		288		221
Total expected intangible asset amortization expense		$	9,691	$	9,962	$	5,650	$	3,907	$	2,696	$	1,358

Certain of our goodwill and other intangible assets are denominated in currencies other than U.S. dollars and, as such, the values of these assets are subject to fluctuations associated with changes in exchange rates. Amortization expense for our intangible assets was $4.9 million and $5.8 millionfor the three months endedJune 30, 2013 and 2012, respectively, and $9.7 million and $11.6 million for the six months endedJune 30, 2013 and 2012, respectively.

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VARIABLE INTEREST ENTITIES - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended			1 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012 person	Mar. 31, 2010 AlMansoori Petroleum Services Limited Liability Company	Mar. 31, 2010 Key Energy Services Incorporation and Subsidiaries	Dec. 31, 2012 Key Energy Services Incorporation and Subsidiaries person
Variable Interest Entity [Line Items]
Variable interest entities, ownership interest						51.00%	49.00%
Number of Board of Directors seats					5			3
Variable interest entities, revenue	$ 4.6	$ 4.0	$ 8.6	$ 7.3
Variable interest entities, net income	0.8	0.8	1.7	1.0
Variable interest entities, assets	16.6		16.6		16.2
Variable interest entities, liabilities	$ 13.4		$ 13.4		$ 14.7

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DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

In September 2012, we completed the sale of our Argentina operations for approximately $12.5 million, net of transaction costs. In connection with the sale, we recognized a total loss of $85.8 million, which includes the noncash impairment charge of $41.5 million recorded in the first quarter of 2012, and a write-off of $51.9 million cumulative translation adjustment previously recorded in accumulated other comprehensive loss during the third quarter of 2012.

The following table presents the results of operations for the Argentina business sold in this transaction for the three and six months endedJune 30, 2012.

	Three Months Ended			Six Months Ended
	June 30, 2012			June 30, 2012
	(in thousands)
REVENUES	$	30,150		$	55,789
COSTS AND EXPENSES:
Direct operating expenses	28,237			54,542
Depreciation and amortization expense	—			143
General and administrative expenses	4,366			8,476
Impairment and other charges	—			41,457
Operating loss	(2,453		)	(48,829		)
Interest expense, net of amounts capitalized	86			137
Other expense, net	1,416			2,248
Loss before tax	(3,955		)	(51,214		)
Income tax benefit	1,501			17,855
Loss from discontinued operations	$	(2,454	)	$	(33,359	)

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (3,958)	$ 31,821
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	112,401	103,784
Asset retirements and impairments	0	41,457
Bad debt expense	901	549
Accretion of asset retirement obligations	305	297
Loss from equity method investments	242	412
Amortization of deferred financing costs and premium	1,358	1,309
Deferred income tax expense (benefit)	(3,085)	3,187
Capitalized interest	(292)	(674)
Loss on disposal of assets, net	848	506
Share-based compensation	9,393	8,444
Excess tax expense (benefit) from share-based compensation	1,501	(4,047)
Changes in working capital:
Accounts receivable	(30,449)	(20,283)
Other current assets	4,611	(33,721)
Accounts payable, accrued interest and accrued expenses	(40,457)	28,316
Share-based compensation liability awards	493	1,443
Other assets and liabilities	(7,131)	29,052
Net cash provided by operating activities	46,681	191,852
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(72,577)	(309,328)
Proceeds from sale of fixed assets	3,881	9,225
Acquisition of the 50% noncontrolling interest in Geostream	(14,600)	0
Investment in Wilayat Key Energy, LLC	0	(676)
Net cash used in investing activities	(83,296)	(300,779)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt	0	205,000
Repayments of capital lease obligations	(379)	(1,007)
Proceeds from borrowings on revolving credit facility	155,000	195,000
Repayments on revolving credit facility	(135,000)	(300,000)
Payment of deferred financing costs	(69)	(4,534)
Repurchases of common stock	(3,134)	(7,417)
Proceeds from exercise of stock options	0	812
Excess tax (expense) benefit from share-based compensation	(1,501)	4,047
Other financing activities	0	12,601
Net cash provided by financing activities	14,917	104,502
Effect of changes in exchange rates on cash	484	(2,738)
Net decrease in cash and cash equivalents	(21,214)	(7,163)
Cash and cash equivalents, beginning of period	45,949	35,443
Cash and cash equivalents, end of period	$ 24,735	$ 28,280

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GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Net carrying value	$ 50,516	$ 60,905
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	7,134	9,332
Accumulated amortization	(4,927)	(5,022)
Net carrying value	2,207	4,310
Patents, trademarks and tradename
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	14,044	14,689
Accumulated amortization	(473)	(410)
Net carrying value	13,571	14,279
Customer relationships and contracts
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	100,256	100,481
Accumulated amortization	(70,446)	(62,143)
Net carrying value	29,810	38,338
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	9,780	7,583
Accumulated amortization	(4,852)	(3,605)
Net carrying value	4,928	3,978
Customer Backlog
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	776	779
Accumulated amortization	(776)	(779)
Net carrying value	$ 0	$ 0

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SEVERANCE, CONTRACT TERMINATION AND MOBILIZATION COSTS - Restructuring Liability by Segment (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	$ 0
Expense	10,553
Payment	(7,350)
Balance as of end of period	3,203
Severance
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	6,321
Payment	(5,989)
Balance as of end of period	332
Lease Cancellation Fees
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	1,937
Payment	(307)
Balance as of end of period	1,630
Mobilization Costs
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	2,295
Payment	(1,054)
Balance as of end of period	1,241
U.S.
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	2,594
Payment	(724)
Balance as of end of period	1,870
U.S. | Severance
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	746
Payment	(724)
Balance as of end of period	22
U.S. | Lease Cancellation Fees
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	1,630
Payment	0
Balance as of end of period	1,630
U.S. | Mobilization Costs
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	218
Payment	0
Balance as of end of period	218
International
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	7,227
Payment	(5,894)
Balance as of end of period	1,333
International | Severance
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	4,843
Payment	(4,533)
Balance as of end of period	310
International | Lease Cancellation Fees
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	307
Payment	(307)
Balance as of end of period	0
International | Mobilization Costs
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	2,077
Payment	(1,054)
Balance as of end of period	1,023
Functional Support
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	732
Payment	(732)
Balance as of end of period	0
Functional Support | Severance
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	732
Payment	(732)
Balance as of end of period	0
Functional Support | Lease Cancellation Fees
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	0
Payment	0
Balance as of end of period	0
Functional Support | Mobilization Costs
Restructuring Reserve [Roll Forward]
Balance as of beginning of period	0
Expense	0
Payment	0
Balance as of end of period	$ 0

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OTHER BALANCE SHEET INFORMATION (Tables)

6 Months Ended

Jun. 30, 2013

Supplemental Balance Sheet Disclosures [Abstract]

Other Current Assets

The table below presents comparative detailed information about other current assets at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other current assets:
Deferred tax assets	$	27,444	$	20,026
Prepaid current assets	25,673		27,736
Reinsurance receivable	9,660		10,217
VAT asset	36,506		32,762
Other	22,853		10,092
Total	$	122,136	$	100,833

Other Current Liabilities

The table below presents comparative detailed information about other current liabilities at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	36,054	$	31,708
Accrued operating expenditures	42,890		42,137
Income, sales, use and other taxes	40,152		62,709
Self-insurance reserve	34,539		35,742
Accrued interest	16,010		15,301
Insurance premium financing	2,999		8,021
Share-based compensation and other liabilities	2,088		5,012
Total	$	174,732	$	200,630

Other Noncurrent Liabilities

The table below presents comparative detailed information about other non-current liabilities at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	11,866	$	11,659
Environmental liabilities	6,530		4,539
Accrued rent	1,140		1,424
Accrued sales, use and other taxes	7,155		6,952
Other	1,331		3,347
Total	$	28,022	$	27,921

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TRANSACTIONS WITH RELATED PARTIES - Additional Information (Details) (Outside directors, USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Anadarko
Related Party Transaction [Line Items]
Transactions with related party, revenue (less than $0.1 million Investee March 31, 2013)	$ 7.6	$ 12.4	$ 14.2	$ 23.8
Transactions with related party, receivables (less than $0.1 million March 31, 2013)	4.2		4.2		3.5
Alexander Proudfoot Practice Of Management Consulting Group Private Limited Company
Related Party Transaction [Line Items]
Transactions with related party, payments for consulting services	$ 0	$ 0	$ 0	$ 1.9

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OTHER INCOME, NET (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Other Income and Expenses [Abstract]
Interest income	$ (84)	$ (7)	$ (95)	$ (14)
Foreign exchange (gain) loss	1,398	(766)	473	(1,705)
Other income, net	(884)	(607)	(1,171)	(690)
Total	$ (430)	$ 1,380	$ 793	$ 2,409

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INCOME TAXES

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

We are subject to U.S. federal income tax as well as income taxes in multiple state and foreign jurisdictions. Our effective tax rates on continuing operations for the three months endedJune 30, 2013 and 2012 were 37.9% and 35.5%, respectively, and 42.0% and 35.7% for the six months endedJune 30, 2013 and 2012, respectively. Our effective tax rate varies due to the mix of pre-tax profit between the U.S. and international taxing jurisdictions with varying statutory rates, the impact of permanent differences, and discrete tax adjustments, such as tax expense or benefit recognized for uncertain tax positions. The variance between our effective rate and the U.S. statutory rate reflects international profit and losses subject to varying statutory rates, the impact of permanent items, mainly non-deductible expenses such as fines and penalties, and expenses subject to statutorily imposed limitations such as meals and entertainment expenses, plus the impact of state income taxes.

As of June 30, 2013 and December 31, 2012, we had $1.2 million of unrecognized tax benefits, net of federal tax benefit, which, if recognized, would impact our effective tax rate. We recognized tax expense of less than $0.1 million for each of the three-month periods ended June 30, 2013 and 2012 related to these items. We have substantially concluded all U.S. federal and state tax matters through the year ended December 31, 2009.

We record interest and penalties related to unrecognized tax benefits as income tax expense. We have accrued a liability of $0.3 million for the payment of interest and penalties as of June 30, 2013 and December 31, 2012, respectively. We believe that it is reasonably possible that $0.7 million of our currently remaining unrecognized tax positions, each of which is individually insignificant, may be recognized in the next twelve months as a result of a lapse of statute of limitations and settlement of ongoing audits. No release of our deferred tax asset valuation allowance was made during the three or six months ended June 30, 2013 and 2012.

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OTHER BALANCE SHEET INFORMATION

6 Months Ended

Jun. 30, 2013

Supplemental Balance Sheet Disclosures [Abstract]

OTHER BALANCE SHEET INFORMATION

OTHER BALANCE SHEET INFORMATION

The table below presents comparative detailed information about other current assets at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other current assets:
Deferred tax assets	$	27,444	$	20,026
Prepaid current assets	25,673		27,736
Reinsurance receivable	9,660		10,217
VAT asset	36,506		32,762
Other	22,853		10,092
Total	$	122,136	$	100,833

The table below presents comparative detailed information about other current liabilities at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	36,054	$	31,708
Accrued operating expenditures	42,890		42,137
Income, sales, use and other taxes	40,152		62,709
Self-insurance reserve	34,539		35,742
Accrued interest	16,010		15,301
Insurance premium financing	2,999		8,021
Share-based compensation and other liabilities	2,088		5,012
Total	$	174,732	$	200,630

The table below presents comparative detailed information about other non-current liabilities at June 30, 2013 and December 31, 2012:

	June 30, 2013		December 31, 2012
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	11,866	$	11,659
Environmental liabilities	6,530		4,539
Accrued rent	1,140		1,424
Accrued sales, use and other taxes	7,155		6,952
Other	1,331		3,347
Total	$	28,022	$	27,921

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012	Mar. 08, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Credit Facility revolving loans	$ 185,000,000	$ 165,000,000
Senior Notes 6.75% Issued March 24 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt stated percentage			6.75%
Senior notes, carrying value	675,000,000	675,000,000
Senior Notes, fair value	663,188,000	680,510,000
Percentage of Senior Notes fair value over carrying value	98.30%
Senior Notes 8.375 Percent Due 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt stated percentage	8.375%
Senior notes, carrying value	3,573,000	3,573,000
Senior Notes, fair value	$ 3,637,000	$ 3,656,000
Percentage of Senior Notes fair value over carrying value	101.80%

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SHARE-BASED COMPENSATION

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

We recognized employee share-based compensation expense of $2.2 million during each of the three months endedJune 30, 2013 and 2012, and the related income tax benefit recognized was $0.9 million and $0.8 million for the same periods. We recognized employee share-based compensation expense of $8.1 million and $8.3 million during the six months endedJune 30, 2013 and 2012, respectively, and the related income tax benefit recognized was $3.1 million and $3.0 million, respectively, for the same period. We did not capitalize any share-based compensation during the three and six months ended June 30, 2013 and 2012.

The unrecognized compensation cost related to our unvested restricted stock as of June 30, 2013 is estimated to be $14.3 million and is expected to be recognized over a weighted- average period of 1.4 years. We do not have unrecognized cost related to our unvested stock options as of June 30, 2013. No phantom stock was outstanding as of June 30, 2013.

During May 2013, we issued 288,780 shares of common stock to our outside directors under the Key Energy Services, Inc. 2012 Equity and Cash Incentive Plan that was approved by our stockholders on May 18, 2013. These shares vested immediately and we recognized $1.8 million of expense related to these awards.

On January 21, 2013, the Compensation Committee of the Board of Directors adopted the Performance Unit Award Agreement (the “2012 PU Award Agreement”) under the Key Energy Services, Inc. 2012 Equity and Cash Incentive Plan (the“2012 Plan”) and the 2013 Performance Unit Plan (the “2013 PU Plan”). We believe that the 2013 PU Plan and 2012 PU Award Agreement will enable us to obtain and retain employees who will contribute to our long term success by aligning the interests of our executives with the interests of our stockholders by providing compensation that is linked directly to increases in share value.

In January 2013, we issued 0.4 million performance units to our executive officers under the 2012 Plan with such material terms as set forth in the 2012 PU Award Agreement. In February 2013, we issued 0.2 million performance units to certain other employees under the 2013 PU Plan. The performance units are measured based on two performance periods from January 1, 2013 to December 31, 2013 and from January 1, 2014 to December 31, 2014. One half of the performance units are measured based on the first performance period, and the other half are measured based on the second performance period. The number of performance units that may be earned by a participant is determined at the end of each performance period based on the relative placement of Key’s total stockholder return for that period within the peer group, as follows:

Company Placement for the Performance Period	Percentile Ranking in Peer Group		Performance Units Earned as a Percentage of Target
First	100	%	200	%
Second	91	%	180	%
Third	82	%	160	%
Fourth	73	%	140	%
Fifth	64	%	120	%
Sixth	55	%	100	%
Seventh	45	%	75	%
Eighth	36	%	50	%
Ninth	27	%	25	%
Tenth	18	%	0	%
Eleventh	9	%	0	%
Twelfth	0	%	0	%

If any performance units vest for a given performance period, the award holder will be paid a cash amount equal to the vested percentage of the performance units multiplied by the closing stock price of our common stock on the last trading day of the performance period. We account for the performance units as a liability-type award as they are settled in cash. As of June 30, 2013, the fair value of outstanding performance units was $2.4 million, and is being accreted to compensation expense over the vesting terms of the awards. As of June 30, 2013, the unrecognized compensation cost related to our unvested performance units is estimated to be $1.6 million and is expected to be recognized over a weighted-average period of 1.6 years.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Litigation

Various suits and claims arising in the ordinary course of business are pending against us. We conduct business throughout the continental United States and may be subject to jury verdicts or arbitrations that result in outcomes in favor of the plaintiffs. We are also exposed to various claims abroad. We continually assess our contingent liabilities, including potential litigation liabilities, as well as the adequacy of our accruals and our need for the disclosure of these items. We establish a provision for a contingent liability when it is probable that a liability has been incurred and the amount is reasonably approximated. We have $1.6 million of other liabilities related to litigation that is deemed probable and reasonably estimated as of June 30, 2013. We do not believe that the disposition of any of these matters will result in an additional loss materially in excess of amounts that have been recorded.

During the second quarter of 2013, two lawsuits with similar allegations of violations of California's wage and hour laws were filed in California. The lawsuits allege failure to pay overtime, failure to pay minimum wages, improper payroll deductions, failure to pay final wages in a timely manner, and violations of the California meal and break period laws, among other claims. We intend to vigorously investigate and defend these actions; however, because these cases are in the very early stages, we cannot predict the outcome of these lawsuits at this time and, accordingly, cannot estimate any possible loss or range of loss.

Self-Insurance Reserves

We maintain reserves for workers’ compensation and vehicle liability on our balance sheet based on our judgment and estimates using an actuarial method based on claims incurred. We estimate general liability claims on a case-by-case basis. We maintain insurance policies for workers’ compensation, vehicle liability and general liability claims. These insurance policies carry self-insured retention limits or deductibles on a per occurrence basis. The retention limits or deductibles are accounted for in our accrual process for all workers’ compensation, vehicular liability and general liability claims. As of June 30, 2013 and December 31, 2012, we have recorded $67.4 million and $69.4 million, respectively, of self-insurance reserves related to workers’ compensation, vehicular liabilities and general liability claims. Partially offsetting these liabilities, we had $19.6 million and $20.6 million of insurance receivables as of June 30, 2013 and December 31, 2012, respectively. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued for existing claims.

Environmental Remediation Liabilities

For environmental reserve matters, including remediation efforts for current locations and those relating to previously disposed properties, we record liabilities when our remediation efforts are probable and the costs to conduct such remediation efforts can be reasonably estimated. While our litigation reserves reflect the application of our insurance coverage, our environmental reserves do not reflect management’s assessment of the insurance coverage that may apply to the matters at issue. As of June 30, 2013 and December 31, 2012, we have recorded $6.5 million and $4.5 million, respectively, for our environmental remediation liabilities. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Jul. 26, 2013
Document Documentand Entity Information [Abstract]
Entity Registrant Name	KEY ENERGY SERVICES INC
Entity Central Index Key	0000318996
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	KEG
Amendment Flag	false
Entity Common Stock, Shares Outstanding		152,441,917

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is determined by dividing net earnings attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted earnings (loss) per common share is based on the increased number of shares that would be outstanding assuming conversion of potentially dilutive outstanding securities using the treasury stock and “as if converted” methods.

The components of our earnings (loss) per share are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(in thousands, except per share amounts)
Basic EPS Calculation:
Numerator
Income (loss) from continuing operations attributable to Key	$	(4,128	)	$	31,495		$	(4,402	)	$	65,590
Loss from discontinued operations, net of tax	—			(2,454		)	—			(33,359		)
Income (loss) attributable to Key	$	(4,128	)	$	29,041		$	(4,402	)	$	32,231
Denominator
Weighted average shares outstanding	152,384			151,087			152,175			151,110
Basic earnings (loss) per share from continuing operations attributable to Key	$	(0.03	)	$	0.21		$	(0.03	)	$	0.43
Basic loss per share from discontinued operations	—			(0.02		)	—			(0.22		)
Basic earnings (loss) per share attributable to Key	$	(0.03	)	$	0.19		$	(0.03	)	$	0.21
Diluted EPS Calculation:
Numerator
Income (loss) from continuing operations attributable to Key	$	(4,128	)	$	31,495		$	(4,402	)	$	65,590
Loss from discontinued operations, net of tax	—			(2,454		)	—			(33,359		)
Income (loss) attributable to Key	$	(4,128	)	$	29,041		$	(4,402	)	$	32,231
Denominator
Weighted average shares outstanding	152,384			151,087			152,175			151,110
Stock options	—			13			—			58
Total	152,384			151,100			152,175			151,168
Diluted earnings (loss) per share from continuing operations attributable to Key	$	(0.03	)	$	0.21		$	(0.03	)	$	0.43
Diluted loss per share from discontinued operations	—			(0.02		)	—			(0.22		)
Diluted earnings (loss) per share attributable to Key	$	(0.03	)	$	0.19		$	(0.03	)	$	0.21

Stock options, warrants and stock appreciation rights (“SARs”) are included in the computation of diluted earnings per share using the treasury stock method. Restricted stock awards are legally considered issued and outstanding when granted and are included in basic weighted average shares outstanding. The diluted earnings per share calculations for the three and six months ended June 30, 2013 excluded the potential exercise of 1.7 million stock options and 0.3 million SARs, because of our net loss from continuing operations in the first and second quarters of 2013. The diluted earnings per share calculation for the three and six months ended June 30, 2012 excluded the potential exercise of 1.9 million and 1.5 million stock options, respectively, because their exercise prices exceeded the average price of our stock during those periods. For each of the three and six month periods ended June 30, 2012, 0.4 million of our SARs were anti-dilutive. No events occurred after June 30, 2013 that would materially affect the number of weighted average shares outstanding.

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COMMITMENTS AND CONTINGENCIES - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2013 lawsuit	Dec. 31, 2012
Commitments and Contingencies Disclosure [Line Items]
Aggregate amount of contingent litigation liabilities	$ 1.6
Number of lawsuits filed	2
Self-insurance liabilities related to workers' compensation, vehicular liabilities, and general liability claims recorded	67.4	69.4
Insurance receivables which partially offset self-insurance liabilities	19.6	20.6
Environmental remediation liabilities recorded	$ 6.5	$ 4.5

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INCOME TAXES - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Continuing operations, effective tax rate	37.90%	35.50%	42.00%	35.70%
Unrecognized tax benefits, net of federal tax benefit, if recognized, would impact effective tax rate	$ 1.2		$ 1.2		$ 1.2
Tax expense, recognized (less than $0.1 million for periods ended 3/31/13 and 3/31/12)	0.1	0.1
Accrued liability for the payment of interest and penalties	0.3		0.3		0.3
Remaining unrecognized tax positions, that may be recognized in the next twelve months	$ 0.7		$ 0.7