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, 2015

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 27, 2015, the number of outstanding shares of common stock of the registrant was 157,583,222.

KEY ENERGY SERVICES, INC.

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended June 30, 2015

Part I — Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
Part II — Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	41

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 are 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, 2014 and “Part II - Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.

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.

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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, 2015			December 31, 2014
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	225,481		$	27,304
Accounts receivable, net of allowance for doubtful accounts of $4,973and $2,925, respectively	181,234			289,466
Inventories	35,143			30,171
Other current assets	79,520			86,854
Total current assets	521,378			433,795
Property and equipment	2,548,319			2,555,515
Accumulated depreciation	(1,410,785		)	(1,320,257		)
Property and equipment, net	1,137,534			1,235,258
Goodwill	561,039			582,739
Other intangible assets, net	12,917			14,500
Other non-current assets	56,910			56,471
TOTAL ASSETS	$	2,289,778		$	2,322,763
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	44,566		$	77,631
Current portion of long-term debt	3,150			—
Other current liabilities	110,223			164,227
Total current liabilities	157,939			241,858
Long-term debt	961,080			737,691
Workers' compensation, vehicular and health insurance liabilities	28,593			29,690
Deferred tax liabilities	178,263			228,394
Other non-current liabilities	27,005			27,067
Commitments and contingencies
Equity:
Common stock, $0.10 par value; 200,000,000 shares authorized,157,654,235 and 153,557,108 shares issued and outstanding	15,765			15,356
Additional paid-in capital	963,612			960,647
Accumulated other comprehensive loss	(36,764		)	(37,280		)
Retained earnings (deficit)	(5,715		)	119,340
Total equity	936,898			1,058,063
TOTAL LIABILITIES AND EQUITY	$	2,289,778		$	2,322,763

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

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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,
	2015			2014			2015			2014
REVENUES	$	197,496		$	350,595		$	465,295		$	706,736
COSTS AND EXPENSES:
Direct operating expenses	158,841			262,883			363,371			521,185
Depreciation and amortization expense	45,896			52,184			93,107			103,279
General and administrative expenses	50,710			57,881			118,354			110,747
Impairment expense	21,352			28,687			43,052			28,687
Operating loss	(79,303		)	(51,040		)	(152,589		)	(57,162		)
Interest expense, net of amounts capitalized	17,058			13,426			30,400			26,980
Other (income) loss, net	(248		)	(2,733		)	4,184			(2,802		)
Loss before income taxes	(96,113		)	(61,733		)	(187,173		)	(81,340		)
Income tax benefit	30,734			9,537			62,118			17,245
NET LOSS	$	(65,379	)	$	(52,196	)	$	(125,055	)	$	(64,095	)
Loss per share:
Basic and diluted	$	(0.42	)	$	(0.34	)	$	(0.80	)	$	(0.42	)
Weighted average shares outstanding:
Basic and diluted	156,347			153,496			155,586			153,157

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

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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,
	2015			2014			2015			2014
NET LOSS	$	(65,379	)	$	(52,196	)	$	(125,055	)	$	(64,095	)
Other comprehensive income (loss):
Foreign currency translation income (loss)	1,213			3,264			516			(2,001		)
COMPREHENSIVE LOSS	$	(64,166	)	$	(48,932	)	$	(124,539	)	$	(66,096	)

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

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Key Energy Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six Months Ended
	June 30,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(125,055	)	$	(64,095	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	93,107			103,279
Impairment expense	43,052			28,687
Bad debt expense	1,362			1,151
Accretion of asset retirement obligations	309			294
Loss (income) from equity method investments	(13		)	79
Amortization and write-off of deferred financing costs and premium	2,061			1,121
Deferred income tax benefit	(12,546		)	(7,707		)
Loss on disposal of assets, net	4,374			3,452
Share-based compensation	6,636			7,101
Excess tax expense from share-based compensation	2,950			1,221
Changes in working capital:
Accounts receivable	106,829			46,970
Other current assets	6,602			(2,419		)
Accounts payable, accrued interest and accrued expenses	(88,277		)	(13,781		)
Share-based compensation liability awards	1,119			1,587
Other assets and liabilities	(43,708		)	328
Net cash provided by (used in) operating activities	(1,198		)	107,268
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(32,675		)	(69,429		)
Proceeds from sale of fixed assets	9,950			7,239
Proceeds from notes receivable	595			2,150
Net cash used in investing activities	(22,130		)	(60,040		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt	—			(3,573		)
Proceeds from long-term debt	305,550			—
Proceeds from borrowings on revolving credit facility	130,000			115,000
Repayments on revolving credit facility	(200,000		)	(160,000		)
Payment of deferred financing costs	(11,072		)	—
Repurchases of common stock	(312		)	(2,211		)
Excess tax expense from share-based compensation	(2,950		)	(1,221		)
Net cash provided by (used in) financing activities	221,216			(52,005		)
Effect of changes in exchange rates on cash	289			(81		)
Net increase (decrease) in cash and cash equivalents	198,177			(4,858		)
Cash and cash equivalents, beginning of period	27,304			28,306
Cash and cash equivalents, end of period	$	225,481		$	23,448

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

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Key Energy Services, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

NOTE 1. GENERAL

Key Energy Services, Inc., and its wholly owned 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 of our 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, 2014 balance sheet was prepared from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 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 2014 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 six months endedJune 30, 2015 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 2014 Form 10-K.

Recent Accounting Developments

ASU 2015-03. In April 2015, the FASB issued ASU 2015-03,Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The objective of this ASU is to simplify presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. We adopted ASU 2015-03 in the second quarter of 2015 using the retrospective transition method. As a result, $10.7 million of unamortized deferred financing costs on our December 31, 2014 balance sheet was reclassified from non-current assets to a direct deduction of long-term debt. The adoption of this standard did not affect our results of operations or cash flows.

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ASU 2014-09. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The objective of this ASU is to establish the principles to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue from contracts with customers. The core principle is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 must be adopted using either a full retrospective method or a modified retrospective method. During a July 2015 meeting, the FASB affirmed a proposal to defer the effective date of the new revenue standard for all entities by one year. As a result, ASU 2014-09 is effective for the Company for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. We are currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements.

NOTE 3. ASSETS HELD FOR SALE

In April 2015, we announced our decision to exit markets in which we participate outside of North America. Our strategy is to sell or relocate the assets of the businesses operating in these markets. During the second quarter of 2015, certain assets of our Oman business unit, which is included in our International reporting segment, met the criteria for assets held for sale. We expect the sale of these assets to occur before the end of 2015. We recorded a $21.4 million impairment of fixed assets to reduce the carrying value of these assets to the fair market value. The assets held for sale includes $3.6 million of property and equipment, net, and $0.6 million of inventories which are included in other non-current assets and other current assets, respectively, on our June 30, 2015 condensed consolidated balance sheet.

NOTE 4. EQUITY

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2015 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings (Deficit)			Total
	Number of Shares		Amount at Par
	(in thousands)
Balance at December 31, 2014	153,557		$	15,356		$	960,647		$	(37,280	)	$	119,340		$	1,058,063
Foreign currency translation	—		—			—			516			—			516
Common stock purchases	(145	)	(15		)	(297		)	—			—			(312		)
Share-based compensation	4,242		424			6,212			—			—			6,636
Tax expense from share-based compensation	—		—			(2,950		)	—			—			(2,950		)
Net loss	—		—			—			—			(125,055		)	(125,055		)
Balance at June 30, 2015	157,654		$	15,765		$	963,612		$	(36,764	)	$	(5,715	)	$	936,898

A reconciliation of the total carrying amount of our equity accounts for six months ended June 30, 2014 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
	Number of Shares		Amount at Par
	(in thousands)
Balance at December 31, 2013	152,331		$	15,233		$	953,306		$	(15,414	)	$	297,968		$	1,251,093
Foreign currency translation	—		—			—			(2,001		)	—			(2,001		)
Common stock purchases	(283	)	(28		)	(2,183		)	—			—			(2,211		)
Share-based compensation	1,537		154			6,947			—			—			7,101
Tax expense from share-based compensation	—		—			(1,221		)	—			—			(1,221		)
Net loss	—		—			—			—			(64,095		)	(64,095		)
Balance at June 30, 2014	153,585		$	15,359		$	956,849		$	(17,415	)	$	233,873		$	1,188,666

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NOTE 5. OTHER BALANCE SHEET INFORMATION

The table below presents comparative detailed information about other current assets at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other current assets:
Deferred tax assets	$	14,688	$	11,823
Prepaid current assets	21,770		28,218
Reinsurance receivable	9,131		9,200
VAT asset	17,452		18,889
Current assets held for sale	591		—
Other	15,888		18,724
Total	$	79,520	$	86,854

The table below presents comparative detailed information about other non-current assets at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other non-current assets:
Deferred tax assets	$	32,875	$	35,238
Reinsurance receivable	9,561		9,537
Deposits	9,457		10,125
Equity method investments	1,000		987
Non-current assets held for sale	3,631		—
Other	386		584
Total	$	56,910	$	56,471

The table below presents comparative detailed information about other current liabilities at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	19,394	$	32,477
Accrued operating expenditures	18,858		45,899
Income, sales, use and other taxes	17,546		25,892
Self-insurance reserve	30,448		31,359
Accrued interest	17,869		15,241
Accrued insurance premiums	1,189		7,515
Share-based compensation and other liabilities	4,919		5,844
Total	$	110,223	$	164,227

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The table below presents comparative detailed information about other non-current liabilities at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	12,608	$	12,525
Environmental liabilities	5,531		5,730
Accrued rent	—		263
Accrued sales, use and other taxes	6,145		5,411
Other	2,721		3,138
Total	$	27,005	$	27,067

NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months endedJune 30, 2015 are as follows:

	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International		Total
	(in thousands)
December 31, 2014	$	297,719	$	24,479	$	82,695		$	173,463	$	4,383	$	582,739
Goodwill impairment	—		—		(21,700		)	—		—		(21,700		)
June 30, 2015	$	297,719	$	24,479	$	60,995		$	173,463	$	4,383	$	561,039

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The components of our other intangible assets as of June 30, 2015 and December 31, 2014 are as follows:

	June 30, 2015			December 31, 2014
	(in thousands)
Noncompete agreements:
Gross carrying value	$	2,269		$	2,269
Accumulated amortization	(1,860		)	(1,710		)
Net carrying value	409			559
Patents, trademarks and tradenames:
Gross carrying value	3,129			3,106
Accumulated amortization	(283		)	(263		)
Net carrying value	2,846			2,843
Customer relationships and contracts:
Gross carrying value	59,079			59,045
Accumulated amortization	(53,571		)	(52,303		)
Net carrying value	5,508			6,742
Developed technology:
Gross carrying value	8,494			8,494
Accumulated amortization	(4,340		)	(4,138		)
Net carrying value	4,154			4,356
Customer backlog:
Gross carrying value	779			779
Accumulated amortization	(779		)	(779		)
Net carrying value	—			—
Total:
Gross carrying value	73,750			73,693
Accumulated amortization	(60,833		)	(59,193		)
Net carrying value	$	12,917		$	14,500

Of our intangible assets at June 30, 2015, $2.7 million are indefinite-lived tradenames and patents which are 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 2015		2016		2017		2018		2019		2020
		(in thousands)
Noncompete agreements	1.3	$	149	$	260	$	—	$	—	$	—	$	—
Trademarks	2.9	20		40		40		17		—		—
Customer relationships and contracts	3.6	1,237		1,876		1,392		431		341		231
Developed technology	15.5	199		398		398		398		324		221
Total expected intangible asset amortization expense		$	1,605	$	2,574	$	1,830	$	846	$	665	$	452

Certain of our other intangible assets are denominated in Russian Rubles 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 $0.8 million and $2.6 millionfor the three months endedJune 30, 2015 and 2014, respectively, and $1.6 million and $5.2 million for the six months endedJune 30, 2015 and 2014, respectively.

We perform an analysis of goodwill impairment on an annual basis unless an event occurs that triggers additional interim testing. The decline in market value of our stock during the fourth quarter of 2014 was determined to be a triggering

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event making it necessary to perform the first step of the goodwill impairment test for our U.S. Rig Services, Coiled Tubing Services, Fishing and Rental Services and Fluid Management Services segments. Based on the results of our step one analysis, the fair value of our U.S. Rig Services, Fluid Management Services and Fishing and Rental Services segments exceeded their carrying values, but the analysis indicated potential impairment in our Coiled Tubing Services segment. Step two of the goodwill impairment testing for the Coiled Tubing Services segment was performed preliminarily during the fourth quarter of 2014 and our analysis concluded that $19.1 million of goodwill was impaired. During the first quarter of 2015, we engaged outside consultants to assist us in finalizing our step two testing. Based on the additional analysis performed, we concluded that there was an additional $21.7 million of goodwill that was impaired.

NOTE 7. LONG-TERM DEBT

As of June 30, 2015 and December 31, 2014, the components of our long-term debt were as follows:

	June 30, 2015			December 31, 2014
	(in thousands)
6.75% Senior Notes due 2021	$	675,000		$	675,000
Term Loan Facility due 2020	315,000			—
Senior Secured Credit Facility revolving loans due 2016	—			70,000
Debt issuance costs and unamortized premium (discount) on debt, net	(25,770		)	(7,309		)
Total	964,230			737,691
Less current portion	(3,150		)	—
Long-term debt	$	961,080		$	737,691

6.75% Senior Notes due 2021

We have outstanding $675.0 million of 6.75% Senior Notes due 2021 (the “2021 Notes”). 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 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. The premium is the excess of (i) the present value of the redemption price of 103.375% of the principal amount, plus all remaining scheduled interest payments due through March 1, 2016 discounted at the treasury rate plus 0.5% over (ii) the principal amount of the note. 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;

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• 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 Facilities 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, 2015, the 2021 Notes were rated 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 investment rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants as of June 30, 2015.

Credit Facilities due 2020

On June 1, 2015, we entered into a $100.0 million asset-based revolving credit facility (“ABL Facility”) due February 28, 2020 and a $315.0 million term loan facility (“Term Loan Facility”) due June 1, 2020 (together, the “Facilities”). The Facilities replaced our existing $400 million 2011 Credit Facility (defined below).

The ABL Facility bears interest at an annual rate on outstanding borrowings of LIBOR plus 4.5%, with a fee on unused commitments ranging from 1.00% to 1.25% based on utilization. The Term Loan Facility was issued at an original issue discount of 3.0% with an annual rate of LIBOR plus 9.25% with a 1.00% LIBOR floor and a quarterly principal payment of $787,500 that will begin in the third quarter of 2015. The original issue discount of $9.4 million and $11.1 million of deferred financing costs will be amortized over the term of the Facilities.

The Facilities contain customary representations and warranties and certain affirmative and negative covenants, including covenants that restrict our ability to take certain actions without the permission of the Facilities lenders or as permitted under the Facilities including the incurrence of debt, the granting of liens, the making of investments, the payment of dividends and the sale of assets. The Facilities also contain financial covenants requiring that we maintain an asset coverage ratio of at least 1.5 to 1.0 and that liquidity, as defined in the Facilities agreements, must not be less than $100.0 million. The ABL also includes a fixed charge coverage ratio of at least 1.0 to 1.0, which is tested only if excess availability under the ABL falls below a specified threshold or upon the occurrence of certain other events. Additionally, in certain situations, we may be required to offer to prepay some principal amounts under the Term Loan Facility including 50% of our fiscal excess cash flow, as defined in the Term Loan Facility agreement.

We were in compliance with covenants of the Facilities as of June 30, 2015. As of June 30, 2015, we have no borrowings outstanding under the ABL Facility and $48.2 million of letters of credit outstanding with borrowing capacity of $44.4 million available subject to covenant constraints under our ABL Facility.

The weighted average interest rates on the outstanding borrowings under the ABL Facility and Term Loan Facility for the three and six month periods ended June 30, 2015 were as follows:

	June 30, 2015
	(in thousands)
ABL Facility	—
Term Loan Facility	10.38	%

Senior Secured Credit Facility

On June 1, 2015, in connection with entering into the ABL Facility and the Term Loan Facility, we terminated our senior secured revolving bank credit facility, dated as of March 31, 2011, as amended through December 5, 2014 (the “2011 Credit Facility”), which was scheduled to mature no later than March 31, 2016. The 2011 Credit Facility provided for a senior secured credit facility consisting of a revolving credit facility, letter of credit sub-facility and swing line facility of up to an aggregate principal amount of $400.0 million. The 2011 Credit Facility was terminated without any prepayment penalties. The remaining unamortized deferred financing costs of $0.8 million were written off at the time of the termination.

The interest rate per annum applicable to the 2011 Credit Facility was, 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 had ranged from 225 to 300 basis points, and the applicable margin for all other loans had ranged 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 was equal to 0.5%. The weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 3.14% and 2.88% for the three-month periods ended June 30, 2015 and June 30, 2014, respectively, and the weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 3.15% and 2.88% for six months endedJune 30, 2015 and June 30, 2014, respectively.

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Letter of Credit Facility

On November 7, 2013, we entered into an uncommitted, unsecured $15.0 million letter of credit facility to be used solely for the issuances of performance letters of credit. As of June 30, 2015, $2.0 million of letters of credit were outstanding under the facility.

NOTE 8. 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,
	2015			2014			2015			2014
	(in thousands)
Interest income	$	(25	)	$	(30	)	$	(40	)	$	(48	)
Foreign exchange (gain) loss	333			(1,377		)	1,593			(11		)
Allowance for collectibility of notes receivable	—			—			3,950			—
Other, net	(556		)	(1,326		)	(1,319		)	(2,743		)
Total	$	(248	)	$	(2,733	)	$	4,184		$	(2,802	)

NOTE 9. 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 for the three months endedJune 30, 2015 and 2014 were 32.0% and 15.4%, respectively, and 33.2% and 21.2% for the six months endedJune 30, 2015 and 2014, 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, including goodwill impairment expense, 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 profits 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, 2015 and December 31, 2014, we had $1.0 million of unrecognized tax benefits, net of federal tax benefit, which, if recognized, would impact our effective tax rate. We recognized a tax expense of less than $0.1 million for the three months ended June 30, 2015 and 2014, related to these items. We have substantially concluded all U.S. federal and state tax matters through the year ended December 31, 2012.

We record interest and penalties related to unrecognized tax benefits as income tax expense. We have accrued a liability of $1.0 million for the payment of interest and penalties as of June 30, 2015 and December 31, 2014. We believe that it is reasonably possible that $0.6 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, 2015 and 2014.

NOTE 10. 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, if any. We establish a provision for a contingent liability when it is probable that a liability has been incurred and the amount is reasonably estimable. We have $0.2 million of other liabilities related to litigation that is deemed probable and reasonably estimable as of June 30, 2015. 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.

Between May of 2013 and June of 2014, five lawsuits (four class actions and one enforcement action) were filed in California involving alleged violations of California's wage and hour laws. In general, the lawsuits allege failure to pay wages, including overtime and minimum wages, failure to pay final wages upon employment terminations in a timely manner, failure to reimburse reasonable and necessary business expenses, failure to provide wage statements consistent with California law,

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and violations of the California meal and break period laws, among other claims. Two of the five cases have been consolidated in United States District Court for the Central District of California. A hearing on the class certification motion is scheduled for August 10, 2015. One of the remaining cases has been stayed pending outcome of the class certification motion. The fourth case is waiting for a decision regarding whether it will move forward in California state court or in federal court. The fifth case is an enforcement action for civil penalties based on California’s Private Attorneys General Act, which is pending in California state court. We have investigated the claims in all five lawsuits, and intend to vigorously defend them. At this time, we cannot estimate any possible loss or range of loss.

In January, 2014, the SEC advised Key that it is investigating possible violations of the U.S. Foreign Corrupt Practices Act (“FCPA”) involving business activities of Key’s operations in Russia. In April 2014, we became aware of an allegation involving our Mexico operations that, if true, could potentially constitute a violation of certain of our policies, including our Code of Business Conduct, the FCPA and other applicable laws. On May 30, 2014, Key voluntarily disclosed the allegation involving our Mexico operations and certain information from the Company’s initial investigation to both the SEC and Department of Justice (“DOJ”). A Special Committee of our Board of Directors is investigating this allegation as well as possible violations of the FCPA involving business activities of our operations in Russia. The fact-finding portion of the Special Committee’s investigation, which also included a review of certain aspects of the Company’s operations in Colombia, as well as a risk assessment with regard to our other international locations, has been completed and the Special Committee is in the process of concluding its work. We continue to cooperate with the investigations by the SEC and DOJ. At this time we are unable to predict the ultimate resolution of these matters with these agencies and, accordingly, cannot reasonably estimate any possible loss or range of loss.

In August 2014, two class action lawsuits were filed in the U.S. District Court, Southern District of Texas, Houston Division, individually and on behalf of all other persons similarly situated against the Company and certain officers of the Company, alleging violations of federal securities laws, specifically, violations of Section 10(b) and Rule 10(b)-5, Section 20(a) of the Securities Exchange Act of 1934. Those lawsuits were styled as follows: Sean Cady, Individually and on Behalf of All Other Persons Similarly Situated v. Key Energy Services, Inc., Richard J. Alario, and J. Marshall Dodson, No. 4:14-cv-2368, filed on August 15, 2014; and Ian W. Davidson, Individually and on Behalf of All Other Persons Similarly Situated v. Key Energy Services, Inc., Richard J. Alario, and J. Marshall Dodson, No. 4.14-cv-2403, filed on August 21, 2014. On December 11, 2014, the Court entered an order that consolidated the two lawsuits into one action, along with any future filed tag-along actions brought on behalf of purchasers of Key Energy Services, Inc. common stock. The order also appointed Inter-Local Pension Fund as the lead plaintiff in the class action and approved the law firm of Spector Roseman Kodroff & Willis, P.C. as lead counsel for the consolidated class and Kendall Law Group, LLP, as local counsel for the consolidated class. The lead plaintiff filed the consolidated amended complaint on February 13, 2015. Among other changes, the consolidated amended complaint adds Taylor M. Whichard III and Newton W. Wilson III as defendants and expands the class period to include the timeframe between September 4, 2012 and July 17, 2014. Defendants Key Energy Services, Inc., Richard J. Alario, J. Marshall Dodson and Newton W. Wilson III filed a Motion to Dismiss on April 14, 2015. Defendant Taylor M. Whichard III filed a Joinder in Motion and Motion to Dismiss on the same date. Because this case is in the early stages, we cannot predict the outcome at this time. Accordingly, we cannot estimate any possible loss or range of loss.

In addition, in a letter dated September 4, 2014, a purported shareholder of the Company demanded that the Board commence an independent internal investigation into and legal proceedings against each member of the Board, a former member of the Board and certain officers of the Company for alleged violations of Maryland and/or federal law. The letter alleges that the Board and senior officers breached their fiduciary duties to the Company, including the duty of loyalty and due care, by (i) improperly accounting for goodwill, (ii) causing the Company to potentially violate the FCPA, resulting in an investigation by the SEC, (iii) causing the Company to engage in improper conduct related to the Company’s Russia operations; and (iv) making false statements regarding, and failing to properly account for, certain contracts with Pemex. As described in the letter, the purported shareholder believes that the legal proceedings should seek recovery of damages in an unspecified amount allegedly sustained by the Company. The Board of Directors referred the demand letter to the Special Committee. We cannot predict the outcome of this matter.

In March 2015, two collective action lawsuits were filed in the Southern District of Texas, Corpus Christi Division, individually and on behalf of all others similarly situated, alleging violations of the Fair Labor Standards Act of 1938 (“FLSA”). We have answered the lawsuits and asserted affirmative defenses. Because the cases are in the early stages, we cannot predict the outcomes at this time. Accordingly, we cannot estimate any possible loss or range of loss for either case.

In April 2015, a collective action lawsuit was filed in the Middle District of Pennsylvania, individually and on behalf of similarly situated employees, alleging violations of the Pennsylvania Minimum Wage Act and the FLSA. This lawsuit was dismissed, without prejudice, on April 30, 2015.

            In May 2015, a class and collective action lawsuit was filed in the Southern District of Texas, Houston Division, individually and on behalf of all others similarly situated, alleging violations of the FLSA and the New Mexico Minimum Wage

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Act. We have answered the lawsuit and asserted affirmative defenses. Because the case is in the early stages, we cannot predict the outcome at this time. Accordingly, we cannot estimate any possible loss or range of loss of this case.

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, 2015 and December 31, 2014, we have recorded $59.0 million and $61.0 million, respectively, of self-insurance reserves related to workers’ compensation, vehicular liabilities and general liability claims. Partially offsetting these liabilities, we had $18.7 million of insurance receivables as of June 30, 2015 and December 31, 2014. 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. As of June 30, 2015 and December 31, 2014, we have recorded $5.5 million and $5.7 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.

NOTE 11. LOSS PER SHARE

Basic loss per share is determined by dividing net loss attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted 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 loss per share are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(in thousands, except per share amounts)
Basic and Diluted EPS Calculation:
Numerator
Net loss	$	(65,379	)	$	(52,196	)	$	(125,055	)	$	(64,095	)
Denominator
Weighted average shares outstanding	$	156,347		$	153,496		$	155,586		153,157
Basic and diluted loss per share	$	(0.42	)	$	(0.34	)	$	(0.80	)	$	(0.42	)

Stock options, warrants and stock appreciation rights (“SARs”) are included in the computation of diluted loss 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, 2015 exclude the potential exercise of 1.3 million stock options and 0.3 million SARs as they would be anti-dilutive due to net loss during the period. The diluted earnings per share calculations for the three months ended June 30, 2014 exclude the potential exercise of 1.3 million stock options and 0.3 million SARs and for the six months ended June 30, 2014 exclude the potential exercise of 1.4 million stock options and 0.3 million SARs as they would be anti-dilutive due to net loss during the period. No events occurred after June 30, 2015 that would materially affect the number of weighted average shares outstanding.

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NOTE 12. SHARE-BASED COMPENSATION

We recognized employee share-based compensation expense of $2.1 million and $2.4 million during the three months endedJune 30, 2015 and 2014, respectively, and the related income tax benefit recognized was $0.7 million for the same periods. We recognized employee share-based compensation expense of $6.2 million and $7.1 million during the six months endedJune 30, 2015 and 2014, respectively, and the related income tax expense recognized was $2.2 million and $2.3 million, respectively, for the same period. We did not capitalize any share-based compensation during the three and six months ended June 30, 2015 and 2014.

The unrecognized compensation cost related to our unvested restricted stock as of June 30, 2015 is estimated to be $10.3 million and is expected to be recognized over a weighted-average period of 1.5 years. All outstanding stock options are vested and there are no unrecognized cost related to our stock options as of June 30, 2015. No phantom stock was outstanding as of June 30, 2015.

During May 2015, we issued 598,860 restricted stock units to our outside directors under the Key Energy Services, Inc. 2014 Equity and Cash Incentive Plan that was approved by our stockholders on May 15, 2014. These restricted stock units vested immediately and we recognized $1.6 million of expense related to these awards. Additionally, during May 2014, we recognized $1.6 million of expense related to similar awards.

In the first quarter of 2015, the Compensation Committee of the Board of Directors adopted both the 2014 Performance Award Agreement (“2014 PU Award Agreement”) under the Key Energy Services, Inc. 2014 Equity and Cash Incentive Plan (the “2014 Plan”) and the 2015 Performance Unit Plan (the “2015 PU Plan”). We believe that the 2015 PU Plan and 2014 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 2015, we issued 2.1 million performance units to our executive officers under the 2014 Plan with such material terms as set forth in the 2014 PU Award Agreement. In February 2015, we issued 0.4 million performance units to certain other employees under the 2015 PU Plan. The performance units are measured based on one three-year performance period from January 1, 2015 to December 31, 2017. The number of performance units that may be earned by a participant is determined at the end of the 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	Performance Units Earned as a Percentage of Target
First	200	%
Second	180	%
Third	160	%
Fourth	140	%
Fifth	120	%
Sixth	100	%
Seventh	0	%
Eighth	0	%
Ninth	0	%
Tenth	0	%
Eleventh	0	%
Twelfth	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, 2015, the fair value of outstanding performance units was $6.2 million, and is being accreted to compensation expense over the vesting terms of the awards. As of June 30, 2015, the unrecognized compensation cost related to our unvested performance units is estimated to be $4.8 million and is expected to be recognized over a weighted-average period of 2.4 years.

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NOTE 13. TRANSACTIONS WITH RELATED PARTIES

Board of Director Relationships

A member of our board of directors is the Executive Vice President, General Counsel and Chief Administrative Officer of Anadarko Petroleum Corporation (“Anadarko”), which is one of our customers. Sales to Anadarko were approximately $2.7 million and $9.3 million for the three months ended June 30, 2015 and 2014, respectively, and $7.8 million and $18.1 million for the six months endedJune 30, 2015 and 2014, respectively. Receivables outstanding from Anadarko were approximately $1.0 million and $2.9 million as of June 30, 2015 and December 31, 2014, respectively. Transactions with Anadarko for our services are made on terms consistent with other customers.

NOTE 14. 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, 2015 and December 31, 2014.

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, 2015				December 31, 2014
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	$	3,755	$	3,755	$	8,300	$	8,300
Financial liabilities:
6.75% Senior Notes due 2021	$	675,000	$	399,938	$	675,000	$	413,438
Term Loan Facility due 2020	315,000		315,000		—		—
Credit Facility revolving loans	—		—		70,000		70,000

Notes receivable — Argentina operations sale. The fair value of these notes receivable are based upon the quoted market Treasury rates as of the 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. The carrying value and fair value are net of a $4.0 million valuation allowance for collectibility of the notes receivable.

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, 2015 was $675.0 million, and the fair value was $399.9 million (59.3% of carrying value).

Term Loan Facility due 2020. Because the variable interest rates of these loans approximate current market rates, the fair values of the loans borrowed under this facility approximate their carrying values.

Credit Facility Revolving Loans. In connection with entering into the ABL Facility and the Term Loan Facility, we terminated our 2011 Credit Facility on June 1, 2015.

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NOTE 15. SEGMENT INFORMATION

We revised our reportable business segments as of the fourth quarter of 2014. The revised reportable segments are U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services and International. We also have a “Functional Support” segment associated with overhead and other costs in support of our reportable segments. Segment disclosures as of and for the the three and six months ended June 30, 2014 have been revised to reflect the change in reportable segments. We revised our segments to reflect changes in management’s resource allocation and performance assessment in making decisions regarding our business. Our U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services operate geographically within the United States. The International reportable segment includes our operations in Mexico, Colombia, Ecuador, Russia, Bahrain and Oman. Our Canadian subsidiary is also reflected in our International reportable segment. We evaluate the performance of our segments based on gross margin measures. All inter-segment sales pricing is based on current market conditions.

U.S. Rig Services

Our U.S. Rig 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 fishing 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 closely related to capital spending by oil and natural gas producers, which is generally a function of oil and natural gas prices.

International

Our International segment includes operations in Mexico, Colombia, Ecuador, the Middle East and Russia. 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, we have a technology development and control systems business based in Canada.

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

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.

In April 2015, we announced our decision to exit markets in which we participate outside of North America. Our strategy is to sell or relocate the assets of the businesses operating in these markets.

Functional Support

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

Financial Summary

The following tables set forth our unaudited segment information as of and for the three and six months ended June 30, 2015 and 2014 (in thousands):

As of and for the three months ended June 30, 2015
	U.S. Rig Services			Fluid Management Services			Coiled Tubing Services			Fishing and Rental Services			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	93,253		$	39,178		$	21,609		$	28,142		$	15,314		$	—		$	—		$	197,496
Intersegment revenues	196			421			—			1,447			798			542			(3,404		)	—
Depreciation and amortization	14,975			6,525			5,841			8,982			6,507			3,066			—			45,896
Impairment expense	—			—			—			—			21,352			—			—			21,352
Other operating expenses	82,410			32,712			19,851			25,734			16,326			32,518			—			209,551
Operating loss	(4,132		)	(59		)	(4,083		)	(6,574		)	(28,871		)	(35,584		)	—			(79,303		)
Interest expense, net of amounts capitalized	—			—			—			—			—			17,058			—			17,058
Loss before income taxes	(4,067		)	(41		)	(4,074		)	(6,574		)	(28,919		)	(52,438		)	—			(96,113		)
Long-lived assets(1)	796,551			171,058			166,931			319,480			221,832			245,188			(152,640		)	1,768,400
Total assets	1,609,569			299,670			251,201			658,464			371,152			(481,597		)	(418,681		)	2,289,778
Capital expenditures, excluding acquisitions	3,201			2,506			2,007			2,124			1,509			2,333			—			13,680

20

As of and for the three months ended June 30, 2014
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	169,980	$	62,087	$	43,108		$	49,340	$	26,080		$	—		$	—		$	350,595
Intersegment revenues	167		32		—			—		2,547			543			(3,289		)	—
Depreciation and amortization	14,630		8,255		5,968			12,088		7,795			3,448			—			52,184
Impairment expense	—		—		—			—		28,687			—			—			28,687
Other operating expenses	132,389		52,874		37,722			36,449		26,444			34,886			—			320,764
Operating income (loss)	22,961		958		(582		)	803		(36,846		)	(38,334		)	—			(51,040		)
Interest expense, net of amounts capitalized	—		—		(1		)	—		26			13,401			—			13,426
Income (loss) before income taxes	23,520		1,183		(392		)	981		(35,289		)	(51,736		)	—			(61,733		)
Long-lived assets(1)	774,613		208,563		232,228			412,033		269,153			256,298			(160,271		)	1,992,617
Total assets	1,565,553		285,746		255,615			649,739		436,067			(358,680		)	(388,932		)	2,445,108
Capital expenditures, excluding acquisitions	25,759		896		2,000			7,691		1,796			2,762			—			40,904

As of and for the six months ended June 30, 2015
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	214,075	$	89,933	$	52,626		$	70,832		$	37,829		$	—		$	—		$	465,295
Intersegment revenues	459		729		—			3,249			2,165			1,084			(7,686		)	—
Depreciation and amortization	29,685		14,247		11,608			17,946			13,336			6,285			—			93,107
Impairment expense	—		—		21,700			—			21,352			—			—			43,052
Other operating expenses	180,522		74,269		47,223			59,516			41,623			78,572			—			481,725
Operating income (loss)	3,868		1,417		(27,905		)	(6,630		)	(38,482		)	(84,857		)	—			(152,589		)
Interest expense, net of amounts capitalized	—		—		—			—			—			30,400			—			30,400
Income (loss) before income taxes	3,965		1,483		(27,894		)	(6,800		)	(39,550		)	(118,377		)	—			(187,173		)
Long-lived assets(1)	796,551		171,058		166,931			319,480			221,832			245,188			(152,640		)	1,768,400
Total assets	1,609,569		299,670		251,201			658,464			371,152			(481,597		)	(418,681		)	2,289,778
Capital expenditures, excluding acquisitions	12,862		3,800		4,121			5,619			2,875			3,398			—			32,675

21

As of and for the six months ended June 30, 2014
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	334,731	$	123,675	$	87,603		$	102,550	$	58,177		$	—		$	—		$	706,736
Intersegment revenues	290		144		—			—		4,768			1,085			(6,287		)	—
Depreciation and amortization	28,791		16,433		11,805			24,615		15,699			5,936			—			103,279
Impairment expense	—		—		—			—		28,687			—			—			28,687
Other operating expenses	258,637		103,937		70,242			74,302		61,128			63,686			—			631,932
Operating income (loss)	47,303		3,305		5,556			3,633		(47,337		)	(69,622		)	—			(57,162		)
Interest expense, net of amounts capitalized	—		—		(1		)	—		28			26,953			—			26,980
Income (loss) before income taxes	48,244		3,698		5,843			3,929		(47,237		)	(95,817		)	—			(81,340		)
Long-lived assets(1)	774,613		208,563		232,228			412,033		269,153			256,298			(160,271		)	1,992,617
Total assets	1,565,553		285,746		255,615			649,739		436,067			(358,680		)	(388,932		)	2,445,108
Capital expenditures, excluding acquisitions	43,896		1,758		3,497			11,155		3,670			5,453			—			69,429

(1) Long-lived assets include fixed assets, goodwill, intangibles and other non-current assets.

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

22

NOTE 16. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Our 2021 Notes, ABL Facility and Term Loan Facility are guaranteed by virtually all 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 UNAUDITED BALANCE SHEETS
	June 30, 2015
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	213,786	$	262,473	$	45,119		$	—		$	521,378
Property and equipment, net	—		1,059,966		77,568			—			1,137,534
Goodwill	—		556,658		4,381			—			561,039
Intercompany notes and accounts receivable and investment in subsidiaries	3,047,124		1,228,949		49,976			(4,326,049		)	—
Other assets	—		51,928		17,899			—			69,827
TOTAL ASSETS	$	3,260,910	$	3,159,974	$	194,943		$	(4,326,049	)	$	2,289,778
Liabilities and equity:
Current liabilities	$	21,018	$	115,315	$	21,606		$	—		$	157,939
Long-term debt	961,080		—		—			—			961,080
Intercompany notes and accounts payable	1,162,648		2,710,438		131,150			(4,004,236		)	—
Deferred tax liabilities	178,008		398		(143		)	—			178,263
Other long-term liabilities	1,276		54,186		136			—			55,598
Equity	936,880		279,637		42,194			(321,813		)	936,898
TOTAL LIABILITIES AND EQUITY	$	3,260,910	$	3,159,974	$	194,943		$	(4,326,049	)	$	2,289,778

23

CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2014
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	39,020	$	341,188	$	53,587		$	—		$	433,795
Property and equipment, net	—		1,128,776		106,482			—			1,235,258
Goodwill	—		578,358		4,381			—			582,739
Intercompany notes and accounts receivable and investment in subsidiaries	3,170,874		1,426,160		42,352			(4,639,386		)	—
Other assets	—		56,664		14,307			—			70,971
TOTAL ASSETS	$	3,209,894	$	3,531,146	$	221,109		$	(4,639,386	)	$	2,322,763
Liabilities and equity:
Current liabilities	$	22,046	$	192,079	$	27,733		$	—		$	241,858
Long-term debt	737,691		—		—			—			737,691
Intercompany notes and accounts payable	1,162,648		2,696,051		123,810			(3,982,509		)	—
Deferred tax liabilities	228,199		398		(134		)	(69		)	228,394
Other long-term liabilities	1,264		55,182		311			—			56,757
Equity	1,058,046		587,436		69,389			(656,808		)	1,058,063
TOTAL LIABILITIES AND EQUITY	$	3,209,894	$	3,531,146	$	221,109		$	(4,639,386	)	$	2,322,763

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	185,061		$	15,118		$	(2,683	)	$	197,496
Direct operating expense	—			148,714			11,325			(1,198		)	158,841
Depreciation and amortization expense	—			43,085			2,811			—			45,896
General and administrative expense	186			48,159			3,842			(1,477		)	50,710
Impairment expense	—			—			21,352			—			21,352
Operating loss	(186		)	(54,897		)	(24,212		)	(8		)	(79,303		)
Interest expense, net of amounts capitalized	17,058			—			—			—			17,058
Other (income) loss, net	(582		)	445			(126		)	15			(248		)
Loss before income taxes	(16,662		)	(55,342		)	(24,086		)	(23		)	(96,113		)
Income tax (expense) benefit	30,756			(74		)	52			—			30,734
Net income (loss)	$	14,094		$	(55,416	)	$	(24,034	)	$	(23	)	$	(65,379	)

24

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	326,835		$	30,272		$	(6,512	)	$	350,595
Direct operating expense	—			245,267			20,632			(3,016		)	262,883
Depreciation and amortization expense	—			48,702			3,482			—			52,184
General and administrative expense	242			55,459			5,623			(3,443		)	57,881
Impairment expense	—			—			28,687			—			28,687
Operating loss	(242		)	(22,593		)	(28,152		)	(53		)	(51,040		)
Interest expense, net of amounts capitalized	13,402			(1		)	25			—			13,426
Other income, net	(618		)	(572		)	(1,564		)	21			(2,733		)
Loss before income taxes	(13,026		)	(22,020		)	(26,613		)	(74		)	(61,733		)
Income tax (expense) benefit	7,977			2,094			(534		)	—			9,537
Net loss	$	(5,049	)	$	(19,926	)	$	(27,147	)	$	(74	)	$	(52,196	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	434,468		$	38,069		$	(7,242	)	$	465,295
Direct operating expense	—			338,340			28,620			(3,589		)	363,371
Depreciation and amortization expense	—			87,524			5,583			—			93,107
General and administrative expense	407			113,794			7,793			(3,640		)	118,354
Impairment expense	—			21,700			21,352			—			43,052
Operating loss	(407		)	(126,890		)	(25,279		)	(13		)	(152,589		)
Interest expense, net of amounts capitalized	30,400			—			—			—			30,400
Other (income) loss, net	(900		)	4,486			583			15			4,184
Loss before income taxes	(29,907		)	(131,376		)	(25,862		)	(28		)	(187,173		)
Income tax benefit	61,618			3			497			—			62,118
Net income (loss)	$	31,711		$	(131,373	)	$	(25,365	)	$	(28	)	$	(125,055	)

25

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	657,310		$	63,553		$	(14,127	)	$	706,736
Direct operating expense	—			481,925			45,684			(6,424		)	521,185
Depreciation and amortization expense	—			96,465			6,814			—			103,279
General and administrative expense	478			105,007			12,957			(7,695		)	110,747
Impairment expense	—			—			28,687			—			28,687
Operating loss	(478		)	(26,087		)	(30,589		)	(8		)	(57,162		)
Interest expense, net of amounts capitalized	26,954			(1		)	27			—			26,980
Other income, net	(1,289		)	(1,296		)	(248		)	31			(2,802		)
Loss before income taxes	(26,143		)	(24,790		)	(30,368		)	(39		)	(81,340		)
Income tax benefit	10,983			5,843			419			—			17,245
Net loss	$	(15,160	)	$	(18,947	)	$	(29,949	)	$	(39	)	$	(64,095	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	—		$	(6,317	)	$	5,119		$	—		$	(1,198	)
Cash flows from investing activities:
Capital expenditures	—			(31,435		)	(1,240		)	—			(32,675		)
Intercompany notes and accounts	—			41,993			—			(41,993		)	—
Other investing activities, net	—			10,545			—			—			10,545
Net cash provided by (used in) investing activities	—			21,103			(1,240		)	(41,993		)	(22,130		)
Cash flows from financing activities:
Proceeds from long-term debt	305,550			—			—			—			305,550
Proceeds from borrowings on revolving credit facility	130,000			—			—			—			130,000
Repayments on revolving credit facility	(200,000		)	—			—			—			(200,000		)
Payment of deferred financing costs	(11,072		)	—			—			—			(11,072		)
Repurchases of common stock	(312		)	—			—			—			(312		)
Intercompany notes and accounts	(41,993		)	—			—			41,993			—
Other financing activities, net	(2,950		)	—			—			—			(2,950		)
Net cash provided by financing activities	179,223			—			—			41,993			221,216
Effect of changes in exchange rates on cash	—			—			289			—			289
Net increase in cash and cash equivalents	179,223			14,786			4,168			—			198,177
Cash and cash equivalents at beginning of period	19,949			450			6,905			—			27,304
Cash and cash equivalents at end of period	$	199,172		$	15,236		$	11,073		$	—		$	225,481

26

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	100,170		$	7,098		$	—		$	107,268
Cash flows from investing activities:
Capital expenditures	—			(66,280		)	(3,149		)	—			(69,429		)
Intercompany notes and accounts	—			(41,350		)	—			41,350			—
Other investing activities, net	—			9,389			—			—			9,389
Net cash used in investing activities	—			(98,241		)	(3,149		)	41,350			(60,040		)
Cash flows from financing activities:
Repayments of long-term debt	(3,573		)	—			—			—			(3,573		)
Proceeds from borrowings on revolving credit facility	115,000			—			—			—			115,000
Repayments on revolving credit facility	(160,000		)	—			—			—			(160,000		)
Repurchases of common stock	(2,211		)	—			—			—			(2,211		)
Intercompany notes and accounts	41,350			—			—			(41,350		)	—
Other financing activities, net	(1,221		)	—			—			—			(1,221		)
Net cash used in financing activities	(10,655		)	—			—			(41,350		)	(52,005		)
Effect of changes in exchange rates on cash	—			—			(81		)	—			(81		)
Net increase (decrease) in cash and cash equivalents	(10,655		)	1,929			3,868			—			(4,858		)
Cash and cash equivalents at beginning of period	23,115			788			4,403			—			28,306
Cash and cash equivalents at end of period	$	12,460		$	2,717		$	8,271		$	—		$	23,448

27

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

OVERVIEW

Key Energy Services, Inc., and its wholly owned 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 six months ended June 30, 2015 and 2014, included elsewhere herein, and the audited consolidated financial statements and notes thereto included in our 2014 Form 10-K.

We operate in five business segments; U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services and International. We also have a “Functional Support” segment associated with managing our U.S. and International business segments. See “Note 15. Segment Information” in “Item 1. Financial Statements” of Part I of this report for a summary of our business segments.

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)
2015:
First Quarter	$	48.49	$	2.90	1,353
Second Quarter	$	57.85	$	2.75	876
2014:
First Quarter	$	98.68	$	5.18	1,779
Second Quarter	$	103.35	$	4.61	1,796
Third Quarter	$	97.87	$	3.96	1,842
Fourth Quarter	$	73.21	$	3.78	1,856

(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.

28

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 2014 through the second quarter of 2015:

	Rig Hours			Trucking Hours	Key’s U.S.  Working Days(1)
2015:	U.S.	International	Total
First Quarter	271,005	36,950	307,955	418,032	62
Second Quarter	232,169	25,555	257,724	342,271	63
Total 2015	503,174	62,505	565,679	760,303	125
2014:
First Quarter	347,047	46,090	393,137	481,353	63
Second Quarter	355,219	33,758	388,977	493,494	63
Third Quarter	365,891	34,603	400,494	506,486	64
Fourth Quarter	341,313	41,156	382,469	481,653	61
Total 2014	1,409,470	155,607	1,565,077	1,962,986	251

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

MARKET CONDITIONS AND OUTLOOK

Market Conditions — Quarter Ended June 30, 2015

Our core businesses depend on our customers’ willingness to make expenditures to produce, develop and explore for oil and natural gas based on the economics of these activities as determined by industry conditions and the prices of 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.

The second quarter continued to present significant challenges for the domestic oil & gas complex as persistent depressed oil prices continued to strain E&P cash flows and associated capital spending. The oilfield services industry activity fell in the second quarter of 2015 as evidenced by the 35% sequential decline of the average Baker Hughes drilling rig count, touching a level that hasn’t been seen in over a decade. The continued decline in oilfield services activity has left an overflow of oilfield service capacity in the market. As such, fierce competitive pressures continued in the second quarter of 2015 as service providers lower the price for their services to keep assets working. The Company was not immune to these dynamics, as activity and pricing both declined materially during the quarter, though our activity in our core production services business continues to perform somewhat better than the decline in the Baker Hughes average rig count.

Outside of the U.S., the Company progressed in its’ efforts in exiting the markets in which it participates outside of North America. In Oman, we have identified a buyer for our assets and are currently negotiating an agreement to exit the business. In Colombia and Ecuador, we are in the process of relocating rigs and some ancillary equipment back to the U.S. In Bahrain, we will be ceasing operations under our contract and are talking to parties for a sale of the assets or business. In Russia, we are talking with several interested parties about a sale of the assets. The exit of certain international markets may require that some assets will be sold at a loss in the future and that severance costs may be incurred in future periods. We believe we will have this effort substantially completed by the end of 2015.

Market Outlook

Persistent low oil prices driven by robust global oil production and a decelerating global demand base has created structural obstacles for the U.S. oil and gas complex, lowering the cash flows of our customers and the amount available to be spend on services we provide. The Company’s exposure and commitment to servicing the needs of existing production is an integral piece to navigating these challenges as the Company believes customers will continue to spend, albeit at lower levels funds to maintain existing production. As the economics supporting drilling and completion activities become uneconomic at current oil prices, we believe this enhances the potential for a greater shift in spending by our customers toward production maintenance activities. Further, we continue to diversify our U.S. revenue base as a result of focusing on the mix of customers and markets where we add the most value.    

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As we look beyond the second quarter, the outlook for the U.S. oilfield services landscape remains challenged with low activity and continued pressure on the price of our services. Given the refinancing of our revolving credit facility during the quarter, we enhanced our balance sheet with new, long-dated capital. Further, we plan to further reduce our capital expenditures for the year and take further actions to adjust our business and organizational structure to the current environment. As a result of these actions, the company may incur losses on disposal of assets or properties and severance costs. Therefore, we believe our new credit facilities due in 2020 with limited capital needs coupled with additional steps to reduce costs and preserve liquidity are necessary given current market conditions.

RESULTS OF OPERATIONS

The following table shows our consolidated results of operations for the three and six months ended June 30, 2015 and 2014, respectively (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
REVENUES	$	197,496		$	350,595		$	465,295		$	706,736
COSTS AND EXPENSES:
Direct operating expenses	158,841			262,883			363,371			521,185
Depreciation and amortization expense	45,896			52,184			93,107			103,279
General and administrative expenses	50,710			57,881			118,354			110,747
Impairment expense	21,352			28,687			43,052			28,687
Operating loss	(79,303		)	(51,040		)	(152,589		)	(57,162		)
Interest expense, net of amounts capitalized	17,058			13,426			30,400			26,980
Other (income) loss, net	(248		)	(2,733		)	4,184			(2,802		)
Loss before income taxes	(96,113		)	(61,733		)	(187,173		)	(81,340		)
Income tax benefit	30,734			9,537			62,118			17,245
NET LOSS	$	(65,379	)	$	(52,196	)	$	(125,055	)	$	(64,095	)

Consolidated Results of Operations — Three Months Ended June 30, 2015 and 2014

Revenues

Our revenues for the three months ended June 30, 2015 decreased $153.1 million, or 43.7%, to $197.5 million from $350.6 million for the three months ended June 30, 2014, due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity. Internationally, we had lower revenue as a result of reduced customer activity in Mexico, Russia and Colombia. See “Segment Operating Results — Three Months Ended June 30, 2015 and 2014” below for a more detailed discussion of the change in our revenues.

Direct Operating Expenses

Our direct operating expenses decreased $104.0 million, to $158.8 million (80.4% of revenues), for the three months ended June 30, 2015, compared to $262.9 million (75.0% of revenues) for the three months ended June 30, 2014. The decrease is primarily related to a decrease in employee compensation costs, fuel expense and repair and maintenance expense as we sought to reduce our cost structure and as a result of lower activity levels.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased $6.3 million, or 12.0%, to $45.9 million during the three months ended June 30, 2015, compared to $52.2 million for the three months ended June 30, 2014. The decrease is primarily attributable to impairment of certain fixed assets and decreases in capital expenditures and lower amortization expense due to the impairment of certain intangible assets.

General and Administrative Expenses

General and administrative expenses decreased $7.2 million, to $50.7 million (25.7% of revenues), for the three months ended June 30, 2015, compared to $57.9 million (16.5% of revenues) for the three months ended June 30, 2014. The decrease is primarily due to lower employee compensation costs as a result of reduced staffing levels and reduction in wages partially offset by increase in expenses related to FCPA investigations.

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Impairment Expense

During the three months ended June 30, 2015, we recorded a $21.4 million impairment of fixed assets in our Oman business unit which is included in our International reporting segment. During the three months ended June 30, 2014, we recorded a $28.7 million impairment of goodwill and tradenames in our Russian business unit which is included in our International reporting segment.

Interest Expense, Net of Amounts Capitalized

Interest expense increased $3.6 million, or 27.1%, to $17.1 million for the three months ended June 30, 2015, compared to $13.4 million for the same period in 2014. The increase is primarily related to increased borrowings and interest rate under the new Term Loan Facility for the three months ended June 30, 2015 compared to the same period in 2014 and the write off of the remaining $0.8 million of unamortized deferred financing costs related to the 2011 Credit Facility in the second quarter of 2015.

Other Income, Net

During the quarter ended June 30, 2015, we recognized other income, net, of $0.2 million, compared to other income, net, of $2.7 million for the quarter ended June 30, 2014. Our foreign exchange (gain) loss relates to U.S. dollar-denominated transactions in our foreign businesses and fluctuations in exchange rates between local currencies and the U.S. dollar.

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

	Three Months Ended June 30,
	2015			2014
	(in thousands)
Interest income	$	(25	)	$	(30	)
Foreign exchange (gain) loss	333			(1,377		)
Other, net	(556		)	(1,326		)
Total	$	(248	)	$	(2,733	)

Income Tax Benefit

We recorded an income tax benefit of $30.7 million on a pre-tax loss of $96.1 million in the three months ended June 30, 2015, compared to an income tax benefit of $9.5 million on a pre-tax loss of $61.7 million in the three months ended June 30, 2014. Our effective tax rate was 32.0% for the three months ended June 30, 2015, compared to 15.4% for the three months ended June 30, 2014. 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 domestic and international taxing jurisdictions and 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, that affect book income but do not affect taxable income.

Segment Operating Results — Three Months Ended June 30, 2015 and 2014

The following table shows operating results for each of our segments for the three months ended June 30, 2015 and 2014 (in thousands):

For the three months ended June 30, 2015
	U.S. Rig Services			Fluid Management Services			Coiled Tubing Services			Fishing and Rental Services			International			Functional Support			Total
Revenues from external customers	$	93,253		$	39,178		$	21,609		$	28,142		$	15,314		$	—		$	197,496
Operating expenses	97,385			39,237			25,692			34,716			44,185			35,584			276,799
Operating loss	(4,132		)	(59		)	(4,083		)	(6,574		)	(28,871		)	(35,584		)	(79,303		)

For the three months ended June 30, 2014
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International			Functional Support			Total
Revenues from external customers	$	169,980	$	62,087	$	43,108		$	49,340	$	26,080		$	—		$	350,595
Operating expenses	147,019		61,129		43,690			48,537		62,926			38,334			401,635
Operating income (loss)	22,961		958		(582		)	803		(36,846		)	(38,334		)	(51,040		)

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U.S. Rig Services

Revenues for our U.S. Rig Services segment decreased $76.7 million, or 45.1%, to $93.3 million for the three months ended June 30, 2015, compared to $170.0 million for the three months ended June 30, 2014. The decrease for this segment is primarily due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity.

Operating expenses for our U.S. Rig Services segment were $97.4 million during the three months ended June 30, 2015, which represented a decrease of $49.6 million, or 33.8%, compared to $147.0 million for the same period in 2014. These expenses decreased primarily as a result of a decrease in employee compensation costs and equipment expense as we sought to reduce our cost structure and as a result of lower activity levels.

Fluid Management Services

Revenues for our Fluid Management Services segment decreased $22.9 million, or 36.9%, to $39.2 million for the three months ended June 30, 2015, compared to $62.1 million for the three months ended June 30, 2014. The decrease for this segment is primarily due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity.

Operating expenses for our Fluid Management Services segment were $39.2 million during the three months ended June 30, 2015, which represented a decrease of $21.9 million, or 35.8%, compared to $61.1 million for the same period in 2014. These expenses decreased primarily as a result of a decrease in equipment expense and employee compensation costs as we sought to reduce our cost structure and as a result of lower activity levels.

Coiled Tubing Services

Revenues for our Coiled Tubing Services segment decreased $21.5 million, or 49.9%, to $21.6 million for the three months ended June 30, 2015, compared to $43.1 million for the three months ended June 30, 2014. The decrease for this segment is primarily due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity.

Operating expenses for our Coiled Tubing Services segment were $25.7 million during the three months ended June 30, 2015, which represented a decrease of $18.0 million, or 41.2%, compared to $43.7 million for the same period in 2014. These expenses decreased primarily as a decrease in employee compensation costs, repair and maintenance expense and fuel costs as we sought to reduce our cost structure and as a result of lower activity levels.

Fishing and Rental Services

Revenues for our Fishing and Rental Services segment decreased $21.2 million, or 43.0%, to $28.1 million for the three months ended June 30, 2015, compared to $49.3 million for the three months ended June 30, 2014. The decrease for this segment is primarily due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity.

Operating expenses for our Fishing and Rental Services segment were $34.7 million during the three months ended June 30, 2015, which represented a decrease of $13.8 million, or 28.5%, compared to $48.5 million for the same period in 2014. These expenses decreased primarily as a result of a decrease in employee compensation costs, repair and maintenance expense and fuel costs as we sought to reduce our cost structure and as a result of lower activity levels.

International

Revenues for our International segment decreased $10.8 million, or 41.3%, to $15.3 million for the three months ended June 30, 2015, compared to $26.1 million for the three months ended June 30, 2014. The decrease was primarily attributable to lower customer activity in Mexico, Russia and Colombia.

Operating expenses for our International segment decreased $18.7 million, or 29.8%, to $44.2 million for the three months ended June 30, 2015, compared to $62.9 million for the three months ended June 30, 2014. These expenses decreased primarily as a result of a decrease in employee compensation costs and equipment expense, primarily due to lower activity, and a decrease in impairment expense.

Functional Support

Operating expenses for Functional Support, which represent expenses associated with managing our U.S. and International reporting segments, decreased $2.8 million, or 7.2%, to $35.6 million (18.0% of consolidated revenues) for the three months ended June 30, 2015 compared to $38.3 million (10.9% of consolidated revenues) for the same period in 2014. The decrease is primarily due to lower employee compensation costs as a result of reduced staffing levels partially offset by increase in expenses related to FCPA investigations.

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Consolidated Results of Operations — Six Months EndedJune 30, 2015 and 2014

Revenues

Our revenues for the six months endedJune 30, 2015 decreased $241.4 million, or 34.2%, to $465.3 million from $706.7 millionfor the six months endedJune 30, 2014, due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity. Internationally, we had lower revenue as a result of reduced customer activity in Mexico, Russia and Colombia. See “Segment Operating Results — Six Months EndedJune 30, 2015 and 2014” below for a more detailed discussion of the change in our revenues.

Direct Operating Expenses

Our direct operating expenses decreased $157.8 million, to $363.4 million (78.1% of revenues), for the six months endedJune 30, 2015, compared to $521.2 million (73.7% of revenues) for the six months endedJune 30, 2014. The decrease is primarily related to a decrease in employee compensation costs, fuel expense and repair and maintenance expense as we sought to reduce our cost structure and as a result of lower activity levels.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased $10.2 million, or 9.8%, to $93.1 million during the six months endedJune 30, 2015, compared to $103.3 millionfor the six months endedJune 30, 2014. The decrease is primarily attributable to impairment of certain fixed assets and decreases in capital expenditures and lower amortization expense due to the impairment of certain intangible assets.

General and Administrative Expenses

General and administrative expenses increased $7.6 million, to $118.4 million (25.4% of revenues), for the six months endedJune 30, 2015, compared to $110.7 million (15.7% of revenues) for the six months endedJune 30, 2014. The increase is primarily due to higher expenses related to FCPA investigations partially offset by lower employee compensation costs due to reduced staffing levels and reduction in wages.

Impairment Expense

During the six months endedJune 30, 2015, we recorded a $21.4 million impairment of fixed assets in our Oman business unit which is included in our International reporting segment and a $21.7 million impairment of goodwill in our Coiled Tubing Services segment related to the finalization of our 2014 goodwill impairment testing. During the six months ended June 30, 2014, we recorded a $28.7 million impairment of goodwill and tradenames in our Russian business unit which is included in our International reporting segment.

Interest Expense, Net of Amounts Capitalized

Interest expense increased $3.4 million, or 12.7%, to $30.4 millionfor the six months endedJune 30, 2015, compared to $27.0 million for the same period in 2014. The increase is primarily related to increased borrowings and interest rate under the new Term Loan Facility for the six months ended June 30, 2015 compared to the same period in 2014 and the write off of the remaining $0.8 million of unamortized deferred financing costs related to the 2011 Credit Facility in the second quarter of 2015.

Other (Income) Loss, Net

During the six months endedJune 30, 2015, we recognized other loss, net, of $4.2 million, compared to other income, net, of $2.8 millionfor the six months endedJune 30, 2014. During the quarter ended March 31, 2015, we recorded an allowance for the collectibility of our notes receivable related to the sale of our operations in Argentina. Our foreign exchange (gain) loss relates to U.S. dollar-denominated transactions in our foreign locations and fluctuations in exchange rates between local currencies and the U.S. dollar.

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

	Six Months Ended June 30,
	2015			2014
	(in thousands)
Interest income	$	(40	)	$	(48	)
Foreign exchange (gain) loss	1,593			(11		)
Allowance for collectibility of notes receivable	3,950			—
Other, net	(1,319		)	(2,743		)
Total	$	4,184		$	(2,802	)

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Income Tax Benefit

We recorded an income tax benefit of $62.1 million on a pre-tax loss of $187.2 millionfor the six months endedJune 30, 2015, compared to an income tax benefit of $17.2 million on a pre-tax loss of $81.3 million for the same period in 2014. Our effective tax rate was 33.2%for the six months endedJune 30, 2015, compared to 21.2%for the six months endedJune 30, 2014. 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 domestic and international taxing jurisdictions and 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, that affect book income but do not affect taxable income.

Segment Operating Results — Six Months EndedJune 30, 2015 and 2014

The following table shows operating results for each of our segments for the six months endedJune 30, 2015 and 2014 (in thousands):

For the six months ended June 30, 2015
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services			International			Functional Support			Total
Revenues from external customers	$	214,075	$	89,933	$	52,626		$	70,832		$	37,829		$	—		$	465,295
Operating expenses	210,207		88,516		80,531			77,462			76,311			84,857			617,884
Operating income (loss)	3,868		1,417		(27,905		)	(6,630		)	(38,482		)	(84,857		)	(152,589		)

For the six months ended June 30, 2014
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services		Fishing and Rental Services		International			Functional Support			Total
Revenues from external customers	$	334,731	$	123,675	$	87,603	$	102,550	$	58,177		$	—		$	706,736
Operating expenses	287,428		120,370		82,047		98,917		105,514			69,622			763,898
Operating loss	47,303		3,305		5,556		3,633		(47,337		)	(69,622		)	(57,162		)

U.S. Rig Services

Revenues for our U.S. Rig Services segment decreased $120.7 million, or 36.0%, to $214.1 millionfor the six months endedJune 30, 2015, compared to $334.7 millionfor the six months endedJune 30, 2014. The decrease for this segment is primarily due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity.

Operating expenses for our U.S. Rig Services segment were $210.2 millionfor the six months endedJune 30, 2015, which represented an decrease of $77.2 million, or 26.9%, compared to $287.4 million for the same period in 2014. These expenses decreased primarily as a result of a decrease in employee compensation costs and equipment expense as we sought to reduce our cost structure and as a result of lower activity levels.

Fluid Management Services

Revenues for our Fluid Management Services segment decreased $33.7 million, or 27.3%, to $89.9 millionfor the six months endedJune 30, 2015, compared to $123.7 millionfor the six months endedJune 30, 2014. The decrease for this segment is primarily due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity.

Operating expenses for our Fluid Management Services segment were $88.5 millionfor the six months endedJune 30, 2015, which represented a decrease of $31.9 million, or 26.5%, compared to $120.4 million for the same period in 2014. These expenses decreased primarily as a result of a decrease in equipment expense and employee compensation costs as we sought to reduce our cost structure and as a result of lower activity levels.

Coiled Tubing Services

Revenues for our Coiled Tubing Services segment decreased $35.0 million, or 39.9%, to $52.6 millionfor the six months endedJune 30, 2015, compared to $87.6 millionfor the six months endedJune 30, 2014. The decrease for this segment is primarily due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity.

Operating expenses for our Coiled Tubing Services segment were $80.5 millionfor the six months endedJune 30, 2015, which represented an decrease of $1.5 million, or 1.8%, compared to $82.0 million for the same period in 2014. These expenses decreased primarily as a result of a decrease in employee compensation costs, repair and maintenance expense and

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fuel costs as we sought to reduce our cost structure and as a result of lower activity levels. These reductions in expenses were largely offset by the $21.7 million impairment of goodwill in the first quarter of 2015.

Fishing and Rental Services

Revenues for our Fishing and Rental Services segment decreased $31.7 million, or 30.9%, to $70.8 millionfor the six months endedJune 30, 2015, compared to $102.6 millionfor the six months endedJune 30, 2014. The decrease for this segment is primarily due to lower spending from our customers as a result of lower oil prices. These market conditions result in a reduction in the price received for our services and reduced customer activity.

Operating expenses for our Fishing and Rental Services segment were $77.5 millionfor the six months endedJune 30, 2015, which represented a decrease of $21.5 million, or 21.7%, compared to $98.9 million for the same period in 2014. These expenses decreased primarily as a result of a decrease in employee compensation costs, repair and maintenance expense and fuel costs as we sought to reduce our cost structure and as a result of lower activity levels.

International

Revenues for our International segment decreased $20.3 million, or 35.0%, to $37.8 millionfor the six months endedJune 30, 2015, compared to $58.2 millionfor the six months endedJune 30, 2014. The decrease was primarily attributable to lower customer activity in Mexico, Russia and Colombia.

Operating expenses for our International segment decreased $29.2 million, or 27.7%, to $76.3 millionfor the six months endedJune 30, 2015, compared to $105.5 millionfor the six months endedJune 30, 2014. These expenses decreased primarily as a result of a decrease in employee compensation costs and equipment expense, primarily due to lower activity, and a decrease in impairment expense.

Functional Support

Operating expenses for Functional Support, which represent expenses associated with managing our U.S. and International reporting segments, increased $15.2 million, or 21.9%, to $84.9 million (18.2% of consolidated revenues) for the six months endedJune 30, 2015 compared to $69.6 million (9.9% of consolidated revenues) for the same period in 2014. The increase is primarily due to increased legal expense related to the FCPA investigations partially offset by lower employee compensation costs due to reduced staffing levels.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition and Liquidity

As of June 30, 2015, we had cash and cash equivalents of $225.5 million. Our working capital was $363.4 million as of June 30, 2015, compared to $191.9 million as of December 31, 2014. Our working capital increased from the prior year end primarily as a result of an increase in cash and cash equivalents related to proceeds of long-term debt. Our total outstanding debt was $964.2 million, and we have no significant debt maturities until 2020. As of June 30, 2015, we have no borrowings outstanding and $48.2 million in committed letters of credit outstanding with borrowing capacity of $44.4 million available subject to covenant constraints under our ABL Facility (defined below).

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Cash Flows

The following table summarizes our cash flows for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30,
	2015			2014
	(in thousands)
Net cash provided by (used in) operating activities	$	(1,198	)	$	107,268
Cash paid for capital expenditures	(32,675		)	(69,429		)
Proceeds received from sale of fixed assets	9,950			7,239
Proceeds from notes receivable	595			2,150
Repayments of long-term debt	—			(3,573		)
Proceeds from long-term debt	305,550			—
Proceeds from borrowings on revolving credit facility	130,000			115,000
Repayments on revolving credit facility	(200,000		)	(160,000		)
Payment of deferred financing costs	(11,072		)	—
Other financing activities, net	(3,262		)	(3,432		)
Effect of exchange rates on cash	289			(81		)
Net increase (decrease) in cash and cash equivalents	$	198,177		$	(4,858	)

Cash used in operating activities was $1.2 million for the six months ended June 30, 2015 compared to cash provided by operating activities of $107.3 million for the six months ended June 30, 2014.

Cash used in investing activities was $22.1 million and $60.0 million for six months endedJune 30, 2015 and 2014, respectively. Investing cash outflows during these periods consisted primarily of capital expenditures. Our capital expenditures through June 30, 2015 primarily relate to our replacement assets for our existing fleet and equipment.

Cash provided by financing activities was $221.2 million for the six months endedJune 30, 2015 compared to cash used in financing activities of $52.0 million for the six months endedJune 30, 2014. Overall financing cash inflows for 2015 primarily relate to proceeds from long-term debt partially offset by net payments on the revolving credit facility and repayments of long-term debt. Overall financing cash outflows for 2014 primarily relate to net payments on the revolving credit facility.

Sources of Liquidity and Capital Resources

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

Debt Service

We have no significant maturities of debt until 2020. Interest on our ABL Facility and Term Loan Facility is due each quarter. Interest to be paid for the remainder of 2015 is approximately $23.0 million related to our 2021 Notes. Principal to be paid for the remainder of 2015 is approximately $1.6 million related to our Term Loan Facility. We expect to fund these payments from cash on hand or generated by operations. At June 30, 2015, our annual debt maturities for our 2021 Notes and Term Loan Facility were as follows:

Year	Principal Payments
	(in thousands)
2015	$	1,575
2016	3,150
2017	3,150
2018	3,150
2019 and thereafter	978,975
Total principal payments	$	990,000

At June 30, 2015, we were in compliance with all the covenants under the ABL Facility and the Term Loan Facility and the indenture governing the 2021 Notes.

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6.75% Senior Notes due 2021

We have outstanding $675.0 million of 6.75% Senior Notes due 2021 (the “2021 Notes”). 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 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. The premium is the excess of (i) the present value of the redemption price of 103.375 of the principal amount, plus all remaining scheduled interest payments due through March 1, 2016 discounted at the treasury rate plus 0.50% over (ii) the principal amount of the note. 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 Facilities 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, 2015, the 2021 Notes were rated 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 investment rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants as of June 30, 2015.

Credit Facilities due 2020

On June 1, 2015, we entered into a $100.0 million asset-based revolving credit facility (“ABL Facility”) due February 28, 2020 and a $315.0 million term loan facility (“Term Loan Facility”) due June 1, 2020 (together, the “Facilities”). The Facilities replaced our $400 million 2011 Credit Facility (defined below).

The ABL Facility bears interest at an annual rate on outstanding borrowings of LIBOR plus 4.5%, with a fee on unused commitments ranging from 1.00% to 1.25% based on utilization. The Term Loan Facility was issued at an original issue discount of 3.0% with an annual rate of LIBOR plus 9.25% with a 1.00% LIBOR floor and a quarterly principal payment of $787,500 that will begin in the third quarter of 2015. The original issue discount of $9.4 million and $11.1 million of deferred financing costs will be amortized over the term of the Facilities.

The Facilities contain customary representations and warranties and certain affirmative and negative covenants, including covenants that restrict our ability to take certain actions without the permission of the Facilities lenders or as permitted under the Facilities including the incurrence of debt, the granting of liens, the making of investments, the payment of

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dividends and the sale of assets. The Facilities also contain financial covenants requiring that we maintain an asset coverage ratio of at least 1.5 to 1.0 and that liquidity, as defined in the Facilities agreements, must not be less than $100.0 million. The ABL also includes a fixed charge coverage ratio of at least 1.0 to 1.0, which is tested only if excess availability under the ABL falls below a specified threshold or upon the occurrence of certain other events. Additionally, in certain situations, we may be required to offer to prepay some principal amounts under the Term Loan Facility including 50% of our fiscal excess cash flow, as defined in the Term Loan Facility agreement.

We were in compliance with covenants of the Facilities as of June 30, 2015. As of June 30, 2015, we have no borrowings outstanding and $48.2 million of letters of credit outstanding with borrowing capacity of $44.4 million available subject to covenant constraints under our ABL Facility.

The weighted average interest rates on the outstanding borrowings under the ABL Facility and Term Loan Facility for the three and six month periods ended June 30, 2015 were as follows:

	June 30, 2015
	(in thousands)
ABL Facility	—	%
Term Loan Facility	10.38	%

Senior Secured Credit Facility

On June 1, 2015, in connection with entering into the ABL Facility and the Term Loan Facility, we terminated our senior secured revolving bank credit facility, dated as of March 31, 2011, as amended through December 5, 2014 (the “2011 Credit Facility”), which was scheduled to mature no later than March 31, 2016. The 2011 Credit Facility provided for a senior secured credit facility consisting of a revolving credit facility, letter of credit sub-facility and swing line facility of up to an aggregate principal amount of $400.0 million. The 2011 Credit Facility was terminated without any prepayment penalties. The remaining unamortized deferred financing costs of $0.8 million were written off at the time of the termination.

The interest rate per annum applicable to the 2011 Credit Facility was, 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 had ranged from 225 to 300 basis points, and the applicable margin for all other loans had ranged 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 was equal to 0.5%. The weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 3.14% and 2.88% for the three-month periods ended June 30, 2015 and June 30, 2014, respectively, and the weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 3.15% and 2.88% for six months endedJune 30, 2015 and June 30, 2014, respectively.

Letter of Credit Facility

On November 7, 2013, we entered into an uncommitted, unsecured $15.0 million letter of credit facility to be used solely for the issuances of performance letters of credit. As of June 30, 2015, $2.0 million of letters of credit were outstanding under the facility.

Off-Balance Sheet Arrangements

At June 30, 2015 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, 2015, we had cash and cash equivalents of $225.5 million, borrowing capacity of $44.4 million, subject to covenant constraints under the ABL Facility, and no significant debt maturities until 2020. 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 ABL 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 ABL Credit Facility and, in the case of acquisitions, equity.

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Capital Expenditures

During the six months ended June 30, 2015, our capital expenditures totaled $32.7 million, primarily related to the ongoing replacement to our rig service fleet, coiled tubing units, fluid transportation equipment and rental equipment. Our capital expenditure plan for 2015 contemplates spending approximately $50.0 million, subject to market conditions. This is primarily related to equipment replacement needs, including ongoing replacement to our rig services fleet. Our capital expenditure program for 2015 is subject to market conditions, including activity levels, commodity prices, industry capacity and specific customer needs. Our focus for 2015 has been and continues to be the maximization of our current equipment fleet, but we may choose to increase our capital expenditures in 2015 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 2015 capital expenditures through a combination of cash on hand, operating cash flow, and borrowings under our ABL 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. We may also incur capital expenditures for strategic investments and acquisitions.

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 2014 Form 10-K. More detailed information concerning market risk can be found in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our 2014 Form 10-K.

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 2015 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

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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 11. Commitments and Contingencies” in “Item 1. Financial Statements” of Part I of this report, which is incorporated herein by reference.

Between May of 2013 and June of 2014, five lawsuits (four class actions and one enforcement action) were filed in California involving alleged violations of California's wage and hour laws. In general, the lawsuits allege failure to pay wages, including overtime and minimum wages, failure to pay final wages upon employment terminations in a timely manner, failure to reimburse reasonable and necessary business expenses, failure to provide wage statements consistent with California law, and violations of the California meal and break period laws, among other claims. Two of the five cases have been consolidated in United States District Court for the Central District of California. A hearing on the class certification motion is scheduled for August 10, 2015. One of the remaining cases has been stayed pending outcome of the class certification motion. The fourth case is waiting for a decision regarding whether it will move forward in California state court or in federal court. The fifth case is an enforcement action for civil penalties based on California’s Private Attorneys General Act, which is pending in California state court. We have investigated the claims in all five lawsuits, and intend to vigorously defend them. At this time, we cannot estimate any possible loss or range of loss.

In January, 2014, the SEC advised Key that it is investigating possible violations of the U.S. Foreign Corrupt Practices Act (“FCPA”) involving business activities of Key’s operations in Russia. In April 2014, we became aware of an allegation involving our Mexico operations that, if true, could potentially constitute a violation of certain of our policies, including our Code of Business Conduct, the FCPA and other applicable laws. On May 30, 2014, Key voluntarily disclosed the allegation involving our Mexico operations and certain information from the Company’s initial investigation to both the SEC and Department of Justice (“DOJ”). A Special Committee of our Board of Directors is investigating this allegation as well as possible violations of the FCPA involving business activities of our operations in Russia. The fact-finding portion of the Special Committee’s investigation, which also included a review of certain aspects of the Company’s operations in Colombia, as well as a risk assessment with regard to our other international locations, has been completed and the Special Committee is in the process of concluding its work. We continue to cooperate with the investigations by the SEC and DOJ. At this time we are unable to predict the ultimate resolution of these matters with these agencies and, accordingly, cannot reasonably estimate any possible loss or range of loss.

In August 2014, two class action lawsuits were filed in the U.S. District Court, Southern District of Texas, Houston Division, individually and on behalf of all other persons similarly situated against the Company and certain officers of the Company, alleging violations of federal securities laws, specifically, violations of Section 10(b) and Rule 10(b)-5, Section 20(a) of the Securities Exchange Act of 1934. Those lawsuits were styled as follows: Sean Cady, Individually and on Behalf of All Other Persons Similarly Situated v. Key Energy Services, Inc., Richard J. Alario, and J. Marshall Dodson, No. 4:14-cv-2368, filed on August 15, 2014; and Ian W. Davidson, Individually and on Behalf of All Other Persons Similarly Situated v. Key Energy Services, Inc., Richard J. Alario, and J. Marshall Dodson, No. 4.14-cv-2403, filed on August 21, 2014. On December 11, 2014, the Court entered an order that consolidated the two lawsuits into one action, along with any future filed tag-along actions brought on behalf of purchasers of Key Energy Services, Inc. common stock. The order also appointed Inter-Local Pension Fund as the lead plaintiff in the class action and approved the law firm of Spector Roseman Kodroff & Willis, P.C. as lead counsel for the consolidated class and Kendall Law Group, LLP, as local counsel for the consolidated class. The lead plaintiff filed the consolidated amended complaint on February 13, 2015. Among other changes, the consolidated amended complaint adds Taylor M. Whichard III and Newton W. Wilson III as defendants and expands the class period to include the timeframe between September 4, 2012 and July 17, 2014. Defendants Key Energy Services, Inc., Richard J. Alario, J. Marshall Dodson and Newton W. Wilson III filed a Motion to Dismiss on April 14, 2015. Defendant Taylor M. Whichard III filed a Joinder in Motion and Motion to Dismiss on the same date. Because this case is in the early stages, we cannot predict the outcome at this time. Accordingly, we cannot estimate any possible loss or range of loss.

In addition, in a letter dated September 4, 2014, a purported shareholder of the Company demanded that the Board commence an independent internal investigation into and legal proceedings against each member of the Board, a former member of the Board and certain officers of the Company for alleged violations of Maryland and/or federal law. The letter alleges that the Board and senior officers breached their fiduciary duties to the Company, including the duty of loyalty and due care, by (i) improperly accounting for goodwill, (ii) causing the Company to potentially violate the FCPA, resulting in an investigation by the SEC, (iii) causing the Company to engage in improper conduct related to the Company’s Russia operations; and (iv) making false statements regarding, and failing to properly account for, certain contracts with Pemex. As described in the letter, the purported shareholder believes that the legal proceedings should seek recovery of damages in an

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unspecified amount allegedly sustained by the Company. The Board of Directors referred the demand letter to the Special Committee. We cannot predict the outcome of this matter.

In March 2015, two collective action lawsuits were filed in the Southern District of Texas, Corpus Christi Division, individually and on behalf of all others similarly situated, alleging violations of the Fair Labor Standards Act of 1938 (“FLSA”). We have answered the lawsuits and asserted affirmative defenses. Because the cases are in the early stages, we cannot predict the outcomes at this time. Accordingly, we cannot estimate any possible loss or range of loss for either case.

In April 2015, a collective action lawsuit was filed in the Middle District of Pennsylvania, individually and on behalf of similarly situated employees, alleging violations of the Pennsylvania Minimum Wage Act and the FLSA. This lawsuit was dismissed, without prejudice, on April 30, 2015.

            In May 2015, a class and collective action lawsuit was filed in the Southern District of Texas, Houston Division, individually and on behalf of all others similarly situated, alleging violations of the FLSA and the New Mexico Minimum Wage Act. We have answered the lawsuit and asserted affirmative defenses. Because the case is in the early stages, we cannot predict the outcome at this time. Accordingly, we cannot estimate any possible loss or range of loss of this case.

ITEM 1A. RISK FACTORS

Reference is made to Part I, Item 1A. Risk Factors of the 2014 Form 10-K, as updated by Part II, Item 1A. Risk Factors of the Form 10-Q for the quarter ended March 31, 2015 for information concerning risk factors.

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

Issuer Purchases of Equity Securities

During the three months ended June 30, 2015, 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:

Period	Number of Shares Purchased	Average Price Paid per Share(1)
April 1, 2015 to April 30, 2015	221	$	1.86
May 1, 2015 to May 31, 2015	38,330	2.59
June 1, 2015 to June 30, 2015	768	1.74
Total	39,319	$	2.57

(1) 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 3, 2015	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

Exhibit No.	Description
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	Eighth Amended and Restated By-laws of Key Energy Services, Inc. as amended through March 16, 2015. (Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on March 17, 2015, File No. 001-08038.)
10.1†*	Key Energy Services, Inc. 2014 Equity and Cash Incentive Plan Performance Unit Award Agreement dated January 30th by and between Richard J. Alario and Key Energy Services, Inc. as revised June 13, 2015.
10.2†	Employment Agreement dated June 22, 2015 by and between Robert Drummond, Key Energy Services, Inc. and Key Energy Services, LLC (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on June 22, 2015, File No. 001-08038.)
10.3	Loan and Security Agreement, dated as of June 1, 2015, among Key Energy Services, Inc. and Key Energy Services, LLC, as the borrowers, certain subsidiaries of the borrowers named as guarantors therein, the financial institutions party thereto from time to time as lenders, Bank of America, N.A., as administrative agent for the lenders, and Bank of America, N.A. and Wells Fargo Bank, National Association, as co-collateral agents for the lenders. (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on June 2, 2015, File No. 001-08038.)
10.4	Term Loan and Security Agreement, dated as of June 1, 2015, among Key Energy Services, Inc., as borrower, certain subsidiaries of the borrower named as guarantors therein, the financial institutions party thereto from time to time as lenders, Cortland Capital Market Services LLC, as agent for the lenders, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as sole lead arranger and sole bookrunner.(Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on June 2, 2015, 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.

†	Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates.
*	Filed herewith

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EX-10.1

Exhibit 10.1

KEY ENERGY SERVICES, INC.

2014 EQUITY AND CASH INCENTIVE PLAN

PERFORMANCE UNIT AWARD AGREEMENT

THIS PERFORMANCE UNIT AWARD AGREEMENT, including the Appendices attached hereto (this “Agreement”), dated as of January 30, 2015 (the “Date of Grant”), is made by and between Key Energy Services, Inc., a Maryland corporation (the “Company”), and Richard J. Alario (the “Participant”).

R E C I T A L S:

WHEREAS, the Company has adopted the Key Energy Services, Inc. 2014 Equity and Cash Incentive Plan (the “Plan”) pursuant to which awards of performance units may be granted (“Performance Units”); and

WHEREAS, in recognition of the Participant’s services to the Company, the Administrator has determined that it is in the best interests of the Company and its stockholders to grant the Performance Units provided for herein (the “Performance Unit Award”) pursuant to the terms of the Plan and subject to the further terms and conditions set forth herein.

NOW, THEREFORE, in consideration for the services rendered by the Participant to the Company and the mutual covenants hereinafter set forth, the parties hereto agree as follows:

1. Grant of Performance Unit. Pursuant solely to Section 7.4 of the Plan, the Company hereby grants the Participant a Performance Unit Award consisting of a target of 1,390,178 Performance Units. Each Performance Unit represents the value of one share of Common Stock. The number of Performance Units that the Participant will actually earn (which may be up to 200% of the target Performance Units) will be determined by the level of achievement of the Performance Goals set forth in Section 3 hereof. Upon the certification by the Administrator of the level of achievement of the Performance Goals for the Performance Period, the Company will pay out the Performance Units the Participant has earned for the Performance Period in cash.

2. Incorporation by Reference. The provisions of the Plan including, without limitation, Sections 11, 12, 14.5, 14.6, and 14.7 thereof, are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Administrator shall have the authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision shall be binding and conclusive upon the Participant and his or her legal representative in respect of any questions arising under the Plan or this Agreement.

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3. Earning of Performance Units.

(a) Performance Goals. The number of Performance Units earned in respect of the Performance Period will be determined at the end of the Performance Period based on the relative placement of the Company within the group that consists of the Company and the Proxy Peer Group (the “Performance Group”), based on Total Shareholder Return as set forth in Section 3(b) below, as follows:

Company Placement In Performance Group for the Performance Period	Performance Units Earned as a Percentage of Target
First	200%
Second	180%
Third	160%
Fourth	140%
Fifth	120%
Sixth	100%
Seventh	0%
Eighth	0%
Ninth	0%
Tenth	0%
Eleventh	0%
Twelfth	0%

As an example, and solely for avoidance of doubt, if the Company’s placement in the Performance Group for the Performance Period is second, the Participant will earn a number of Performance Units for the Performance Period equal to the product of (a) the number of target Performance Units, times (b) 180%.

(b) Proxy Peer Group TSR. In order to determine the Company’s placement, total shareholder return will be calculated by the Administrator or its designee for all members of the Proxy Peer Group on the same basis as Total Shareholder Return is calculated for the Company.

(c) Employment Condition. Except as provided in Section 5 and Section 6 hereof, a Participant must continue in Continuous Service through the payment date in respect of a Performance Unit to be eligible for payment with respect to the Performance Period. Except as provided in Section 5 and Section 6, if the Participant’s Continuous Service terminates for any reason before the payment date, the Participant will not receive any payment in respect of the Performance Units.

(d) Certification. Following completion of the Performance Period, the Administrator shall review and certify in writing whether, and to what extent, the performance goal for the Performance Period has been achieved and, if so, calculate and certify in writing the number of Performance Units that the Participant earned for such period based upon the Company’s TSR relative to the Proxy Peer Group. Performance Units that do not vest shall be forfeited as of the end of the Performance Period.

4. Payment.

(a) Timing. Payment in respect of the Performance Unit Award will be made in cash, less applicable tax withholding amounts, as soon as administratively practicable following completion of the certification required by Section 3(d) above, and in any event within sixty (60) days following the end of the Performance Period, except as otherwise provided in Section

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6. Such payment shall be subject to the Participant’s Continuous Service through the payment date, except as provided in Section 5 and Section 6.

(b) Amount. The amount payable to the Participant in respect of the Performance Period will be equal to the product of (i) and (ii) where (i) is the number of Performance Units earned for the Performance Period, as determined by the Administrator in accordance with Section 3, and (ii) is the closing price per share of the Common Stock on the last trading day of the Performance Period.

5. Termination of Employment.

(a) Death or Disability Following the end of the Performance Period. Notwithstanding the provisions of Section 3(c), in the case of the Participant’s death or Disability following the end of the Performance Period but prior to the payment date for the Performance Period, any payment earned by the Participant with respect to the Performance Period shall be paid to the Participant (or the Particpant’s beneficiary, as applicable) at the date described in Section 4(a).

(b) Participant Employment Agreement. Notwithstanding the foregoing, if termination of Continuous Service by Participant would cause the Equity-Based Incentives to vest under the terms of the Participant’s Employment Agreement, the Administrator shall cause the Performance Units to vest and be paid within sixty (60) days following the Participant’s termination of Continuous Service calculated as follows:

i) The Performance Period shall end as of the day immediately preceding the closing date of the termination of Continuous Service (the “Termination Date”) and the Final Stock Price for the Performance Period shall be based on the 30 calendar day period ending on the Termination Date and any dividends declared during the Performance Period and on or prior to the Termination Date (the “Termination Date Value.”)

ii) The Administrator shall calculate a “Termination Amount” equal to (x) the number of Performance Units that would be payable based on the Company’s TSR as of the Termination Date, as determined by the Administrator, and the Company’s placement within the Performance Group as of such date, multiplied by (y) the Termination Date Value and (z) the Pro-Rata Period.

(c) Other Termination of Employment. Except as provided above or in Section 6below, all Performance Units with respect to the Performance Period shall be forfeited upon the Participant’s termination of Continuous Service before the payment date for the Performance Period.

6. Change in Control.

(a) If a Change in Control occurs during the Performance Period, the Administrator shall calculate a Change in Control Amount as follows:

i) The Performance Period shall end as of the day immediately preceding the closing date of the Change in Control (the “Change in Control Date”) and the Final Stock Price for the Performance Period shall be based on the 30 calendar day period ending on the Change in Control Date and any dividends declared during the Performance Period and on or prior to the Change in Control Date (the “Change in Control Value”).

ii) The Administrator shall calculate a “Change in Control Amount” equal to (x) the number of Performance Units that would be payable based on the Company’s TSR as of the Change

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in Control Date, as determined by the Administrator, and the Company’s placement within the Performance Group as of such date, multiplied by (y) the Change in Control Value.

(b) If a Change in Control occurs during the Performance Period and the Participant continues in Continuous Service through December 31, 2017, the Change in Control Amount shall be paid in cash between January 1, 2018 and March 1, 2018.

(c) Notwithstanding the foregoing, if a Change in Control occurs during the Performance Period, and the Participant’s Continuous Service is terminated by the Company without Cause upon or following the Change in Control and prior to the payment date, then the Change in Control Amount shall vest and be paid within sixty (60) days following the Participant’s termination of Continuous Service.

(d) Notwithstanding the foregoing, in the event of a Change in Control, the Administrator may take such other actions with respect to the Performance Units as it deems appropriate pursuant to the Plan and any applicable employment agreement between the Participant and the Company or an Affiliate.

7. Tax Withholding. The Company shall have the right to withhold from any payment due under the Plan and this Agreement an amount equal to the applicable required withholding obligation in respect of any federal, state or local tax.

8. No Rights as Stockholder. The Participant shall have no rights as a stockholder with respect to the shares of Common Stock underlying the Performance Units, nor shall the Participant have any rights to Dividend Equivalents with respect to the Performance Units.

9. Restrictive Covenants. If the Participant’s primary work location is in a State other than California, then the provisions of Appendix A attached hereto shall apply to the Participant. If the Participant’s primary work location is in California, then the provisions of Appendix B attached hereto shall apply to the Participant.

10. Compliance with Laws, Regulations and Company Policies. The grant and payment of the Performance Units shall be subject to compliance by the Company and the Participant with all applicable requirements of state and federal laws and regulatory agencies and with all applicable requirements of any stock exchange on which the Company’s Common Stock may be listed at the time of such issuance or transfer, if applicable. This Performance Unit Award shall also be subject to any applicable clawback or recoupment policies, share trading and stock ownership policies, and other policies that may be implemented by the Board from time to time.

11. Section 409A. Any amounts payable with respect to the Performance Units are intended to be exempt from Section 409A of the Code in reliance on the short-term deferral exemption set forth in the final regulations issued thereunder. If any amounts payable with respect to the Performance Units are determined to be subject to Section 409A of the Code, such payments may only be made under this Agreement upon an event and in a manner permitted by Section 409A of the Code. All payments to be made upon a termination of employment may only be made upon a “separation from service” under Section 409A of the Code. For purposes of Section 409A of the Code, each payment shall be treated as a separate payment. In no event may the Participant, directly or indirectly, designate the calendar year in which the payments under this Award Letter will be made. Notwithstanding anything in this Agreement to the contrary, if the Participant is a “specified employee” as defined by Section 409A of the Code, then if and to the extent required by Section 409A of the Code, any payment with respect to the Performance Units upon a separation from service will not be made be made before the date that is six months after the Participant separates from service or such earlier date permitted by Section 409A of the Code.

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12. No Right to Continuous Service. Nothing in this Agreement shall be deemed by implication or otherwise to impose any limitation on any right of the Company or any of its Affiliates to terminate the Participant’s Continuous Service at any time.

13. Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first class mail, return receipt requested, telecopier, courier service or personal delivery:

if to the Company:

Key Energy Services, Inc.

1301 McKinney Street, Suite 1800

Houston, Texas 77010

Facsimile: 713-651-4559

Attention: General Counsel

if to the Participant, at the Participant’s last known address on file with the Company.

All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) business days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if telecopied.

14. Bound by Plan. By accepting this Agreement, the Participant acknowledges that he or she has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all of the terms and provisions of the Plan.

15. Beneficiary. The Participant may file with the Administrator a written designation of a beneficiary on such form as may be prescribed by the Administrator and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the legal representative of the Participant’s estate shall be deemed to be the Participant’s beneficiary.

16. Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and on the Participant and the beneficiaries, executors, administrators, heirs, and successors of the Participant.

17. Amendment of Performance Unit Award. Subject to Section 18 of this Agreement and subject to the terms of the Plan, the Administrator at any time and from time to time may amend the terms of this Performance Unit Award; provided, however, that the Participant’s rights under this Performance Unit Award shall not be impaired by any such amendment unless the Company requests the Participant’s consent and the Participant consents in writing, or except as otherwise permitted under the Plan.

18. Adjustment Upon Changes in Capitalization. The shares of Common Stock underlying the Performance Units and the Performance Goals may be adjusted as provided in the Plan including, without limitation, Section 11 of the Plan. The Participant, by his or her execution and entry into this Agreement, irrevocably and unconditionally consents and agrees to any such adjustments as may be made at any time hereafter.

19. Governing Law and Venue. The provisions of this Agreement shall be construed and enforced in accordance with the laws and decisions of the State of Texas, without regard to Texas’ conflict of law principles. Any dispute or conflict between the parties shall be brought in a state or federal court located in Harris County, Texas. The parties hereto submit to jurisdiction and venue in Harris County, Texas and all objections to such venue and jurisdiction are hereby waived.

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20. Severability. If any provision of this Agreement or any part of any provision of this Agreement is determined to be unenforceable for any reason whatsoever, it shall be severable from the rest of the Agreement and shall not invalidate or affect the other portions or parts of this Agreement, which shall remain in full force and effect. Furthermore, each covenant contained in this Agreement shall stand independently and be enforceable without regard to any other covenants or to any other provisions of this Agreement.

21. Waiver. The waiver by the Company of a breach of any provision contained in this Agreement shall not operate or be construed as a waiver of any subsequent breach or as a waiver of any other provisions of this Agreement.

22. Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation of construction, and shall not constitute a part of this Agreement.

23. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

24. Definitions.

(a) “Employment Agreement” means the employment agreement between the Company (or its affiliate or subsidiary) and the Participant.

(b) “Equity-Based Incentives” shall have the meaning set forth in the Participant’s Employment Agreement.

(c) “Final Stock Price” means the sum of (i) and (ii) where (i) is the average closing stock price of the Common Stock for the last thirty (30) trading days of the Performance Period and (ii) is any dividends paid per share over the Performance Period.

(d) “Initial Stock Price” means the average closing stock price of the Common Stock for the thirty (30) trading days immediately preceding the Performance Period.

(e) “Performance Period” means the period from January 1, 2015 through December 31, 2017, subject to Section 6 above.

(f) “Pro-Rata Period” means the pro-rata time period of Continuous Service during the Performance Period determined by dividing (i) by (ii), where (i) equals the total number of days of Participant’s Continuous Service beginning and including January 1, 2015 until the Termination Date and (ii) is the total number of days in the Performance Period.

(g) “Proxy Peer Group” means Basic Energy Services, Inc. (BAS); C&J Energy Services, Inc. (CJES); Exterran Holdings, Inc. (EXH); Helix Energy Solutions Group, Inc. (HLX); Oceaneering International, Inc. (OII); Oil States International, Inc. (OIS); Patterson-UTI Energy, Inc. (PTEN); Pioneer Energy Services Corp (PES); RPC, Inc. (RES); Seventy Seven Energy Inc. (SSE); and Superior Energy Services, Inc. (SPN).

(h) “Total Shareholder Return” or “TSR” means the change in value of a share of Common Stock determined by dividing (i) by (ii), where (i) equals the Final Stock Price minus the Initial Stock Price and (ii) equals the Initial Stock Price.

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25.Right to Reject Performance Unit Award; Deemed Acceptance.

If the Participant DOES NOT WISH TO ACCEPT this Performance Unit Award and to be bound by the terms and conditions of this Agreement, the Participant must provide written notice of the Participant’s desire to reject this Performance Unit Award within 30 daysof the receipt of this Agreement and such written notice must be signed and dated. Such written notice must be sent to:

Key Energy Services

Attention: Legal Department

1301 McKinney Street

Suite 1800

Houston, Texas, 77010

If the Participant does not provide timely written notice of rejection of the Performance Unit Award within 30 days of receipt of this Agreement, the Participant shall be DEEMED to: (a) acknowledge receipt of the Plan incorporated herein, (b) confirm that the prospectus for the Plan has been made available to the Participant, (c) acknowledge that he or she has read this Agreement, the Plan and the Plan prospectus and understands the terms and conditions of them, (d) accept the Performance Unit Award described in this Agreement, (e) agree to be bound by the terms of the Plan and this Agreement, and (f) agree that all decisions and determinations of the Committee with respect to the Performance Unit Award shall be final and binding on the Participant, his or her beneficiaries, and any other person having or claiming an interest under this Performance Unit Award.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Agreement effective as of the Date of Grant set forth above.

KEY ENERGY SERVICES, INC.

By: ../s/ KIM B. CLARKE

Name: Kim B. Clarke

Title: Senior Vice President, Administration

and Chief People Officer

Address: 1301 McKinney Street,

Suite 1800

Houston, Texas 77010

By deemed acceptance of this Performance Unit Award as described in Section 25 above, the Participant (a) acknowledges receipt of the Plan incorporated herein, (b) confirms that the prospectus for the Plan has been made available to the Participant, (c) acknowledges that he or she has read this Agreement, the Plan and the Plan prospectus and understands the terms and conditions of them, (d) accepts the Performance Unit Award described in this Agreement, (e) agrees to be bound by the terms of the Plan and this Agreement, and (f) agrees that all decisions and determinations of the Committee with respect to the Performance Unit Award shall be final and binding on the Participant, his or her beneficiaries, and any other person having or claiming an interest under the Performance Unit Award.

The undersigned hereby accepts the terms of this Agreement and the Plan.

../s/ RICHARD J. ALARIO

Richard J. Alario

ADDRESS: 5342 Bordley

Houston, Texas 77056

EMPLOYEE ID NUMBER: 111133334

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APPENDIX A

The provisions of this Appendix A shall apply to the Participant if the Participant’s primary work location is in a State other than California.

(a) The Participant acknowledges that the Company and its Affiliates (collectively, the “Key Energy Companies”) will provide the Participant with “Confidential Information” throughout the Participant’s employment with the Key Energy Companies. In addition to its meaning under the applicable law, Confidential Information shall include all non-public information owned, possessed, developed, or used by the Key Energy Companies, whether or not created or maintained in written form, which constitutes, relates to, or refers to the Key Energy Companies or their business, including, but not limited to, any and all of the following: techniques, know-how, policies, procedures, intellectual property, technology, procurement requirements, purchasing and financial information, accounting information, manufacturing information, customer lists, data, and information, pricing, procedures and methods, strategies, expenditures, business plans and forecasts, marketing and financial information, costs, business prospects, business opportunities, financial data, commercial data, custom or proprietary data, prices, trade secrets, designs, design specifications, strategic plans, product development information (or other proprietary product data), marketing plans, processes, techniques, formulas, inventions, devices, training manuals, training materials, computer programs, databases, client documents, client lists, client contact information, risk management, engineering data, analytical models, vendor lists, vendor contact information, employee names, compensation, competencies, skills, performance or other employee information, and any similar or other non-public or proprietary information. The Participant agrees that Confidential Information shall be and remain the sole and absolute property of the Key Energy Companies. Upon termination of the Participant’s Continuous Service for any reason, the Participant shall immediately return to the Key Energy Companies all documents and materials that contain or constitute Confidential Information of the Key Energy Companies, in any form whatsoever, including, but not limited to, all copies, summaries, and abstracts thereof. The Participant agrees not to disclose, use, re-create, copy, duplicate, or otherwise permit the use, re-creation, disclosure, unauthorized copying, or duplication of any Confidential Information of the Key Energy Companies other than in connection with authorized activities conducted in the course of the Participant’s service with the Key Energy Companies for the benefit of the Key Energy Companies. All Confidential Information that by its nature cannot be returned, including, but not limited to, electronic information, shall be obliterated and destroyed upon termination of the Participant’s Continuous Service.

(b) Good-Will. As a result of the Performance Units granted herein, and/or the Participant’s position with the Key Energy Companies, the Participant will develop and cultivate the business Good-Will of the Key Energy Companies, which includes but is not limited to the relationships between the Key Energy Companies and its Customers or Other Third Parties, as defined herein (“Good-Will”). The Participant understands and acknowledges that the restrictive covenants herein are in part designed to protect the Good-Will of the Key Energy Companies.

(c) Non-Competition. In exchange for the Confidential Information provided to the Participant as described in Section (a) above, the grant of the Performance Units hereunder, and the Good-Will of the Key Energy Companies associated with the Performance Units as described in Section (b) above, employment, and other consideration as provided herein, the Participant agrees that the Participant will not, directly or indirectly, own, manage, operate, join, become

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an employee of, control, or participate in any manner in any Competing Business during the Prohibited Period within the Restricted Area.

(d) Non-Solicitation of Service Providers. In exchange for the Confidential Information provided to the Participant as described in Section (a) above, the grant of the Performance Units hereunder, employment, and other consideration as provided herein, the Participant agrees that the Participant will not, directly or indirectly, solicit any Service Provider of the Key Energy Companies to leave his or her employment or service with the Key Energy Companies, employ or seek to employ, or hire or seek to hire, any Service Provider of the Key Energy Companies, or cause or induce any Competing Business to solicit or employ any Service Provider of the Key Energy Companies during the Prohibited Period within the Restricted Area.

(e) Non-Solicitation of Customers or Other Third Parties. In exchange for the Confidential Information provided to the Participant as described in Section (a) above, the grant of the Performance Units hereunder, employment, and other consideration as provided herein, the Participant agrees that the Participant will not, directly or indirectly, recruit, solicit, or otherwise induce or influence in any way any of the then existing Customers or Other Third Parties to discontinue or reduce the extent of their business relationship with the Key Energy Companies during the Prohibited Period within the Restricted Area.

(f) Definitions. For purposes of this Appendix A:

i) “Business” means any and all onshore or offshore oil and gas services provided by the Key Energy Companies to any client or customer of the Key Energy Companies.

ii) “Competing Business” means any business, individual, partnership, firm, corporation, or other entity (other than the Key Energy Companies) that engages in any aspect of the Business with which the Participant was involved within 12 months before the termination of the Participant’s Continuous Service, or provides services so similar in nature to those which the Key Energy Companies provide and with which the Participant was involved within 12 months before the termination of the Participant’s Continuous Service that it would displace business opportunities or customers of the Key Energy Companies, within the Restricted Area. The Participant will be considered to be involved with an aspect of the Business if the Participant has business-related interactions, or receives Confidential Information, with respect to such aspect of the Business.

iii) “Customers or Other Third Parties” means any customers, distributors, or sales representatives of the Key Energy Companies with whom the Participant had direct business dealings, or otherwise had access to Confidential Information about, during the Participant’s employment with the Key Energy Companies.

iv) “Prohibited Period” means the period during which the Participant is employed by the Key Energy Companies and the twelve (12) month period following the date on which the Participant’s Continuous Service terminates for any reason.

v) If the Participant at any time works primarily at a facility other than in Louisiana, “Restricted Area” means the 100 mile radius surrounding the location where the Participant primarily performed services or reported during the last two (2) years of the Participant’s period of employment with the Key Energy Companies. If the Participant at any time works primarily at a facility in Louisiana, then “Restricted Area” means the 100 mile radius surrounding any of the following parishes in which the Participant primarily performed services or reported during the last two (2) years

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of Participant’s period of employment with the Key Energy Companies: Calcasieu, Terrebonne, Jefferson Davis, and/or St. Martin.

vi) “Service Provider” means any person who is personally providing services to the Key Energy Companies as an employee, consultant or independent contractor.

(g) Effect of Employment or Other Agreement. Notwithstanding the foregoing, in the event of any inconsistency between the covenants set forth above in Sections (a), (b), (c), (d), or (e) and the restrictive covenants in any written employment or other agreement entered into between any of the Key Energy Companies and the Participant, the restrictive covenants of such employment or other agreement shall control; provided that Sections (i) and (j) of this Appendix A shall apply to this Performance Unit Award in the event of any breach of the restrictive covenants of such employment or other agreement.

(h) Enforceability. The parties agree that if the scope or enforceability of the covenants set forth in this Appendix A are in any way disputed at any time, it is the intent of the parties that a court or other trier of fact modify and enforce the covenants to the extent required to render them enforceable.

(i) Injunctive Relief and Other Equitable Relief. The Participant acknowledges and agrees that the business of the Key Energy Companies is highly competitive, that the Confidential Information has been developed by the Key Energy Companies at significant expense and effort, and that the restrictions contained in this Appendix A are reasonable and necessary to protect the legitimate business interests of the Key Energy Companies. The Participant acknowledges that the services the Participant will render to the Key Energy Companies are of a special, unique, and extraordinary character, which give them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in any action at law. By reason of this, the Participant consents and agrees that in addition to any other remedies the Key Energy Companies may have at law, the forfeiture requirements set forth in Section (j) below, and the remedies set forth in Section 14.5 of the Plan, if the Participant violates any provision or covenant set forth in this Appendix A, the Key Energy Companies shall be entitled to the remedies of injunction, specific performance, and other equitable relief. This Appendix A shall not, however, be construed as a waiver of any of the rights to which the Key Energy Companies may be entitled for damages or otherwise.

(j) The Participant acknowledges and agrees that in the event the Participant breaches any of the covenants or agreements contained in this Appendix A (including covenants described in Section (g)):

i) The Committee may in its discretion determine that the Participant shall forfeit all of the outstanding Performance Units, and the outstanding Performance Units shall immediately terminate, and

ii) The Committee may in its discretion require the Participant to return to the Company any payment received in settlement of the Performance Units, in such manner and on such terms as may be required by the Committee. The Company shall be entitled to set-off against such amounts any amount owed to the Participant by the Company, subject to compliance with Section 409A of the Code, if applicable. The Committee shall exercise the right of recoupment provided in this Section (j)(ii) within one year after the Participant’s breach of any of the covenants or agreements contained in this Appendix A (including covenants described in Section (g)).

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APPENDIX B

The provisions of this Appendix B shall apply to the Participant if the Participant’s primary work location is in California.

(a) The Participant acknowledges that the Company and its Affiliates (collectively, the “Key Energy Companies”) will provide the Participant with “Confidential Information” throughout the Participant’s employment with the Key Energy Companies. In addition to its meaning under the applicable law, Confidential Information shall include all non-public information owned, possessed, developed, or used by the Key Energy Companies, whether or not created or maintained in written form, which constitutes, relates to, or refers to the Key Energy Companies or their business, including, but not limited to, any and all of the following: techniques, know-how, policies, procedures, intellectual property, technology, procurement requirements, purchasing and financial information, accounting information, manufacturing information, customer lists, data, and information, pricing, procedures and methods, strategies, expenditures, business plans and forecasts, marketing and financial information, costs, business prospects, business opportunities, financial data, commercial data, custom or proprietary data, prices, trade secrets, designs, design specifications, strategic plans, product development information (or other proprietary product data), marketing plans, processes, techniques, formulas, inventions, devices, training manuals, training materials, computer programs, databases, client documents, client lists, client contact information, risk management, engineering data, analytical models, vendor lists, vendor contact information, employee names, compensation, competencies, skills, performance or other employee information, and any similar or other non-public or proprietary information. The Participant agrees that Confidential Information shall be and remain the sole and absolute property of the Key Energy Companies. Upon termination of the Participant’s Continuous Service for any reason, the Participant shall immediately return to the Key Energy Companies all documents and materials that contain or constitute Confidential Information of the Key Energy Companies, in any form whatsoever, including, but not limited to, all copies, summaries, and abstracts thereof. The Participant agrees not to disclose, use, re-create, copy, duplicate, or otherwise permit the use, re-creation, disclosure, unauthorized copying, or duplication of any Confidential Information of the Key Energy Companies other than in connection with authorized activities conducted in the course of the Participant’s service with the Key Energy Companies for the benefit of the Key Energy Companies. All Confidential Information that by its nature cannot be returned, including, but not limited to, electronic information, shall be obliterated and destroyed upon termination of the Participant’s Continuous Service.

(b) Non-Solicitation of Service Providers. In exchange for the Confidential Information provided to the Participant as described in Section (a) above, the grant of the Performance Units hereunder, employment, and other consideration as provided herein, the Participant agrees that the Participant will not, directly or indirectly, solicit any Service Provider of the Key Energy Companies to leave his or her employment or service with the Key Energy Companies, employ or seek to employ, or hire or seek to hire, any Service Provider of the Key Energy Companies, or cause or induce any Competing Business to solicit or employ any Service Provider of the Key Energy Companies during the Prohibited Period within the Restricted Area.

(c) Non-Solicitation of Customers or Other Third Parties. In exchange for the Confidential Information provided to the Participant as described in Section (a) above, the grant of the Performance Units hereunder, employment, and other consideration as provided herein, the Participant agrees that the Participant will not, on behalf of a Competing Business or otherwise,

use or disclose, or assist others in using or disclosing, the Key Energy Companies’ trade secrets or Confidential Information for the purposes of directly or indirectly soliciting, accepting as a client, or performing services of any type that the Key Energy Companies provides or renders for any person or entity, including any current or former client of the Key Energy Companies.

(d) Definitions. For purposes of this Appendix B:

i) “Business” means any and all onshore or offshore oil and gas services provided by the Key Energy Companies to any client or customer of the Key Energy Companies.

ii) “Competing Business” means any business, individual, partnership, firm, corporation, or other entity (other than the Key Energy Companies) that engages in any aspect of the Business with which the Participant was involved within 12 months before the termination of the Participant’s Continuous Service, or provides services so similar in nature to those which the Key Energy Companies provide and with which the Participant was involved within 12 months before the termination of the Participant’s Continuous Service that it would displace business opportunities or customers of the Key Energy Companies, within the Restricted Area. The Participant will be considered to be involved with an aspect of the Business if the Participant has business-related interactions, or receives Confidential Information, with respect to such aspect of the Business.

iii) “Customers or Other Third Parties” means any customers, distributors, or sales representatives of the Key Energy Companies with whom the Participant had direct business dealings, or otherwise had access to Confidential Information about, during the Participant’s employment with the Key Energy Companies.

iv) “Prohibited Period” means the period during which the Participant is employed by the Key Energy Companies and the twelve (12) month period following the date on which the Participant’s Continuous Service terminates for any reason.

v) “Restricted Area” means the 100 mile radius surrounding any location where the Participant performed services, reported or regularly attended during the last two (2) years of the Participant’s period of employment with the Key Energy Companies.

vi) “Service Provider” means any person who is personally providing services to the Key Energy Companies as an employee, consultant or independent contractor.

(e) Effect of Employment or Other Agreement. Notwithstanding the foregoing, in the event of any inconsistency between the covenants set forth above in Sections (a), (b) or (c) and the restrictive covenants in any written employment or other agreement entered into between any of the Key Energy Companies and the Participant, the restrictive covenants of such employment or other agreement shall control; provided that Sections (g) and (h) of this Appendix B shall apply to this Performance Unit Award in the event of any breach of the restrictive covenants of such employment or other agreement.

(f) Enforceability. The parties agree that if the scope or enforceability of the covenants set forth in this Appendix B are in any way disputed at any time, it is the intent of the parties that a court or other trier of fact modify and enforce the covenants to the extent required to render them enforceable.

(g) Injunctive Relief and Other Equitable Relief. The Participant acknowledges and agrees that the business of the Key Energy Companies is highly competitive, that the Confidential Information has been developed by the Key Energy Companies at significant expense and effort, and that the restrictions contained in this Appendix B are reasonable and necessary to

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protect the legitimate business interests of the Key Energy Companies. The Participant acknowledges that the services the Participant will render to the Key Energy Companies are of a special, unique, and extraordinary character, which give them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in any action at law. By reason of this, the Participant consents and agrees that in addition to any other remedies the Key Energy Companies may have at law, the forfeiture requirements set forth in Section (h) below, and the remedies set forth in Section 14.5 of the Plan, if the Participant violates any provision or covenant set forth in this Appendix B, the Key Energy Companies shall be entitled to the remedies of injunction, specific performance, and other equitable relief. This Appendix B shall not, however, be construed as a waiver of any of the rights to which the Key Energy Companies may be entitled for damages or otherwise.

(h) The Participant acknowledges and agrees that in the event the Participant breaches any of the covenants or agreements contained in this Appendix B (including covenants described in Section (e)):

i) The Committee may in its discretion determine that the Participant shall forfeit all of the outstanding Performance Units, and the outstanding Performance Units shall immediately terminate, and

ii) The Committee may in its discretion require the Participant to return to the Company any payment received in settlement of the Performance Units, in such manner and on such terms as may be required by the Committee. The Company shall be entitled to set-off against such amounts any amount owed to the Participant by the Company, subject to compliance with Section 409A of the Code, if applicable. The Committee shall exercise the right of recoupment provided in this Section (h)(ii) within one year after the Participant’s breach of any of the covenants or agreements contained in this Appendix B (including covenants described in Section (e)).

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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 3, 2015	/s/ RICHARD J. ALARIO
		Richard J. Alario
		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 3, 2015	/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, 2015 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 3, 2015	/s/ RICHARD J. ALARIO
		Richard J. Alario
		Chief Executive Officer
		(Principal Executive Officer)

Dated:	August 3, 2015	/s/ J. MARSHALL DODSON
		J. Marshall Dodson
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

XML

OTHER BALANCE SHEET INFORMATION - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Other non-current liabilities:
Asset retirement obligations	$ 12,608	$ 12,525
Environmental liabilities	5,531	5,730
Accrued rent	0	263
Accrued sales, use and other taxes	6,145	5,411
Other	2,721	3,138
Total	$ 27,005	$ 27,067

XML

SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended				3 Months Ended		6 Months Ended
	Feb. 28, 2015	Jan. 31, 2015	May. 31, 2014	May. 31, 2013	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award requisite service period							3 years
Share-based compensation expense recognized					$ 2.1	$ 2.4	$ 6.2	$ 7.1
Income tax benefit recognized related to share-based awards					0.7	$ 0.7	2.2	$ 2.3
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense expected to be recognized					$ 10.3		$ 10.3
Compensation expense expected to be recognized, weighted average remaining vesting period							1 year 6 months
Phantom Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares outstanding (shares)					0		0
Performance Based Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance units issued	400,000	2,100,000
Fair value of outstanding performance units issued					$ 6.2		$ 6.2
Compensation expense expected to be recognized					$ 4.8		$ 4.8
Compensation expense expected to be recognized, weighted average remaining vesting period							2 years 4 months 24 days
Outside directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense recognized			$ 1.6	$ 1.6
Shares of common stock issued			598,860

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LONG-TERM DEBT LONG-TERM DEBT - Letter of Credit Facility (Details) $ in Millions	Jun. 30, 2015 USD ($)
Debt Disclosure [Abstract]
Maximum borrowing capacity	$ 15.0
Letters of Credit Outstanding, Amount	$ 2.0

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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, 2015
First
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	200.00%
Second
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	180.00%
Third
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	160.00%
Fourth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	140.00%
Fifth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	120.00%
Sixth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	100.00%
Seventh
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	0.00%
Eighth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	0.00%
Ninth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	0.00%
Tenth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	0.00%
Eleventh
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	0.00%
Twelfth
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Units Earned as a Percentage of Target	0.00%

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LONG-TERM DEBT LONG-TERM DEBT - Facilities due 2020 (Details) - USD ($)	3 Months Ended			6 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 15,000,000		$ 15,000,000
Credit Facility revolving loans, carrying value		0		0		$ 70,000,000
Letters of Credit Outstanding, Amount		2,000,000		2,000,000
ABL Facilities due 2020 [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 100,000,000		$ 100,000,000
Line of Credit Facility, Expiration Date				Feb. 28, 2020
Commitment fee minimum		1.00%		1.00%
Commitment fee maximum		1.25%		1.25%
Debt Instrument Interest Additional Interest Above annual L I B O R Rate				4.50%
Fixed charge coverage ratio		1.0		1.0
Credit Facility revolving loans, carrying value		$ 0		$ 0
Letters of Credit Outstanding, Amount		48,200,000		48,200,000
Line of Credit Facility, Remaining Borrowing Capacity		$ 44,400,000		44,400,000
Line Of Credit Facility Weighted Average Interest Rate During Period		0.00%
Term Loan Facilities due 2020 [Member]
Debt Instrument [Line Items]
Term Loan Facility due 2020		$ 315,000,000		$ 315,000,000		$ 0
Term Loan Facilities, Expiration Date				Jun. 01, 2020
Original Issue Discount Rate		3.00%		3.00%
Debt Instrument Interest Additional Interest Above annual L I B O R Rate				9.25%
L I B O R floor				1.00%
Quarterly Loan Principal Payment	$ 787,500.000
Debt Instrument, Unamortized Discount		$ 9,400,000		$ 9,400,000
Loan Facility Weighted Average Interest Rate During Period		10.38%
Credit Facilities due 2020 [Member]
Debt Instrument [Line Items]
Deferred Finance Costs, Gross		$ 11,100,000		$ 11,100,000
Leverage ratio		1.5		1.5
Minimum liquidity requirement		$ 100,000,000		$ 100,000,000
2011 Credit Facility
Debt Instrument [Line Items]
Commitment fee minimum		0.50%		0.50%
Line Of Credit Facility Weighted Average Interest Rate During Period		3.14%	2.88%	3.15%	2.88%
2011 Credit Facility | Amendment Of Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 400,000,000		$ 400,000,000
Line of Credit Facility, Expiration Date				Mar. 31, 2016

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables)

6 Months Ended

Jun. 30, 2015

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING UNAUDITED BALANCE SHEETS
	June 30, 2015
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	213,786	$	262,473	$	45,119		$	—		$	521,378
Property and equipment, net	—		1,059,966		77,568			—			1,137,534
Goodwill	—		556,658		4,381			—			561,039
Intercompany notes and accounts receivable and investment in subsidiaries	3,047,124		1,228,949		49,976			(4,326,049		)	—
Other assets	—		51,928		17,899			—			69,827
TOTAL ASSETS	$	3,260,910	$	3,159,974	$	194,943		$	(4,326,049	)	$	2,289,778
Liabilities and equity:
Current liabilities	$	21,018	$	115,315	$	21,606		$	—		$	157,939
Long-term debt	961,080		—		—			—			961,080
Intercompany notes and accounts payable	1,162,648		2,710,438		131,150			(4,004,236		)	—
Deferred tax liabilities	178,008		398		(143		)	—			178,263
Other long-term liabilities	1,276		54,186		136			—			55,598
Equity	936,880		279,637		42,194			(321,813		)	936,898
TOTAL LIABILITIES AND EQUITY	$	3,260,910	$	3,159,974	$	194,943		$	(4,326,049	)	$	2,289,778

CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2014
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	39,020	$	341,188	$	53,587		$	—		$	433,795
Property and equipment, net	—		1,128,776		106,482			—			1,235,258
Goodwill	—		578,358		4,381			—			582,739
Intercompany notes and accounts receivable and investment in subsidiaries	3,170,874		1,426,160		42,352			(4,639,386		)	—
Other assets	—		56,664		14,307			—			70,971
TOTAL ASSETS	$	3,209,894	$	3,531,146	$	221,109		$	(4,639,386	)	$	2,322,763
Liabilities and equity:
Current liabilities	$	22,046	$	192,079	$	27,733		$	—		$	241,858
Long-term debt	737,691		—		—			—			737,691
Intercompany notes and accounts payable	1,162,648		2,696,051		123,810			(3,982,509		)	—
Deferred tax liabilities	228,199		398		(134		)	(69		)	228,394
Other long-term liabilities	1,264		55,182		311			—			56,757
Equity	1,058,046		587,436		69,389			(656,808		)	1,058,063
TOTAL LIABILITIES AND EQUITY	$	3,209,894	$	3,531,146	$	221,109		$	(4,639,386	)	$	2,322,763

Condensed Consolidating Unaudited Statements of Operations

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	185,061		$	15,118		$	(2,683	)	$	197,496
Direct operating expense	—			148,714			11,325			(1,198		)	158,841
Depreciation and amortization expense	—			43,085			2,811			—			45,896
General and administrative expense	186			48,159			3,842			(1,477		)	50,710
Impairment expense	—			—			21,352			—			21,352
Operating loss	(186		)	(54,897		)	(24,212		)	(8		)	(79,303		)
Interest expense, net of amounts capitalized	17,058			—			—			—			17,058
Other (income) loss, net	(582		)	445			(126		)	15			(248		)
Loss before income taxes	(16,662		)	(55,342		)	(24,086		)	(23		)	(96,113		)
Income tax (expense) benefit	30,756			(74		)	52			—			30,734
Net income (loss)	$	14,094		$	(55,416	)	$	(24,034	)	$	(23	)	$	(65,379	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	326,835		$	30,272		$	(6,512	)	$	350,595
Direct operating expense	—			245,267			20,632			(3,016		)	262,883
Depreciation and amortization expense	—			48,702			3,482			—			52,184
General and administrative expense	242			55,459			5,623			(3,443		)	57,881
Impairment expense	—			—			28,687			—			28,687
Operating loss	(242		)	(22,593		)	(28,152		)	(53		)	(51,040		)
Interest expense, net of amounts capitalized	13,402			(1		)	25			—			13,426
Other income, net	(618		)	(572		)	(1,564		)	21			(2,733		)
Loss before income taxes	(13,026		)	(22,020		)	(26,613		)	(74		)	(61,733		)
Income tax (expense) benefit	7,977			2,094			(534		)	—			9,537
Net loss	$	(5,049	)	$	(19,926	)	$	(27,147	)	$	(74	)	$	(52,196	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	434,468		$	38,069		$	(7,242	)	$	465,295
Direct operating expense	—			338,340			28,620			(3,589		)	363,371
Depreciation and amortization expense	—			87,524			5,583			—			93,107
General and administrative expense	407			113,794			7,793			(3,640		)	118,354
Impairment expense	—			21,700			21,352			—			43,052
Operating loss	(407		)	(126,890		)	(25,279		)	(13		)	(152,589		)
Interest expense, net of amounts capitalized	30,400			—			—			—			30,400
Other (income) loss, net	(900		)	4,486			583			15			4,184
Loss before income taxes	(29,907		)	(131,376		)	(25,862		)	(28		)	(187,173		)
Income tax benefit	61,618			3			497			—			62,118
Net income (loss)	$	31,711		$	(131,373	)	$	(25,365	)	$	(28	)	$	(125,055	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	657,310		$	63,553		$	(14,127	)	$	706,736
Direct operating expense	—			481,925			45,684			(6,424		)	521,185
Depreciation and amortization expense	—			96,465			6,814			—			103,279
General and administrative expense	478			105,007			12,957			(7,695		)	110,747
Impairment expense	—			—			28,687			—			28,687
Operating loss	(478		)	(26,087		)	(30,589		)	(8		)	(57,162		)
Interest expense, net of amounts capitalized	26,954			(1		)	27			—			26,980
Other income, net	(1,289		)	(1,296		)	(248		)	31			(2,802		)
Loss before income taxes	(26,143		)	(24,790		)	(30,368		)	(39		)	(81,340		)
Income tax benefit	10,983			5,843			419			—			17,245
Net loss	$	(15,160	)	$	(18,947	)	$	(29,949	)	$	(39	)	$	(64,095	)

Condensed Consolidating Unaudited Statements of Cash Flows

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	—		$	(6,317	)	$	5,119		$	—		$	(1,198	)
Cash flows from investing activities:
Capital expenditures	—			(31,435		)	(1,240		)	—			(32,675		)
Intercompany notes and accounts	—			41,993			—			(41,993		)	—
Other investing activities, net	—			10,545			—			—			10,545
Net cash provided by (used in) investing activities	—			21,103			(1,240		)	(41,993		)	(22,130		)
Cash flows from financing activities:
Proceeds from long-term debt	305,550			—			—			—			305,550
Proceeds from borrowings on revolving credit facility	130,000			—			—			—			130,000
Repayments on revolving credit facility	(200,000		)	—			—			—			(200,000		)
Payment of deferred financing costs	(11,072		)	—			—			—			(11,072		)
Repurchases of common stock	(312		)	—			—			—			(312		)
Intercompany notes and accounts	(41,993		)	—			—			41,993			—
Other financing activities, net	(2,950		)	—			—			—			(2,950		)
Net cash provided by financing activities	179,223			—			—			41,993			221,216
Effect of changes in exchange rates on cash	—			—			289			—			289
Net increase in cash and cash equivalents	179,223			14,786			4,168			—			198,177
Cash and cash equivalents at beginning of period	19,949			450			6,905			—			27,304
Cash and cash equivalents at end of period	$	199,172		$	15,236		$	11,073		$	—		$	225,481

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	100,170		$	7,098		$	—		$	107,268
Cash flows from investing activities:
Capital expenditures	—			(66,280		)	(3,149		)	—			(69,429		)
Intercompany notes and accounts	—			(41,350		)	—			41,350			—
Other investing activities, net	—			9,389			—			—			9,389
Net cash used in investing activities	—			(98,241		)	(3,149		)	41,350			(60,040		)
Cash flows from financing activities:
Repayments of long-term debt	(3,573		)	—			—			—			(3,573		)
Proceeds from borrowings on revolving credit facility	115,000			—			—			—			115,000
Repayments on revolving credit facility	(160,000		)	—			—			—			(160,000		)
Repurchases of common stock	(2,211		)	—			—			—			(2,211		)
Intercompany notes and accounts	41,350			—			—			(41,350		)	—
Other financing activities, net	(1,221		)	—			—			—			(1,221		)
Net cash used in financing activities	(10,655		)	—			—			(41,350		)	(52,005		)
Effect of changes in exchange rates on cash	—			—			(81		)	—			(81		)
Net increase (decrease) in cash and cash equivalents	(10,655		)	1,929			3,868			—			(4,858		)
Cash and cash equivalents at beginning of period	23,115			788			4,403			—			28,306
Cash and cash equivalents at end of period	$	12,460		$	2,717		$	8,271		$	—		$	23,448

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS - Carrying Amounts and Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financial liabilities:
Credit Facility revolving loans, carrying value	$ 0	$ 70,000
Credit Facility revolving loans, fair value	0	70,000
6.75% Senior Notes due 2021
Financial liabilities:
Senior notes, carrying value	675,000	675,000
Senior notes, fair value	399,938	413,438
Argentina Operations Sale
Financial assets:
Notes receivable, carrying value	3,755	8,300
Notes receivable, fair value	3,755	8,300
Term Loan Facilities due 2020 [Member]
Financial liabilities:
Senior notes, fair value	315,000	0
Term Loan Facility due 2020	$ 315,000	$ 0

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OTHER BALANCE SHEET INFORMATION (Tables)

6 Months Ended

Jun. 30, 2015

Supplemental Balance Sheet Disclosures [Abstract]

Other Current Assets

The table below presents comparative detailed information about other current assets at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other current assets:
Deferred tax assets	$	14,688	$	11,823
Prepaid current assets	21,770		28,218
Reinsurance receivable	9,131		9,200
VAT asset	17,452		18,889
Current assets held for sale	591		—
Other	15,888		18,724
Total	$	79,520	$	86,854

Other Current Liabilities

The table below presents comparative detailed information about other current liabilities at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	19,394	$	32,477
Accrued operating expenditures	18,858		45,899
Income, sales, use and other taxes	17,546		25,892
Self-insurance reserve	30,448		31,359
Accrued interest	17,869		15,241
Accrued insurance premiums	1,189		7,515
Share-based compensation and other liabilities	4,919		5,844
Total	$	110,223	$	164,227

Other Noncurrent Assets

The table below presents comparative detailed information about other non-current assets at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other non-current assets:
Deferred tax assets	$	32,875	$	35,238
Reinsurance receivable	9,561		9,537
Deposits	9,457		10,125
Equity method investments	1,000		987
Non-current assets held for sale	3,631		—
Other	386		584
Total	$	56,910	$	56,471

Other Noncurrent Liabilities

The table below presents comparative detailed information about other non-current liabilities at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	12,608	$	12,525
Environmental liabilities	5,531		5,730
Accrued rent	—		263
Accrued sales, use and other taxes	6,145		5,411
Other	2,721		3,138
Total	$	27,005	$	27,067

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INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Effective tax rate	32.00%	15.40%	33.20%	21.20%
Unrecognized tax benefits, net of federal tax benefit, if recognized, would impact effective tax rate	$ 1.0		$ 1.0		$ 1.0
Tax expense related to unrecognized tax benefits	(0.1)	$ (0.1)
Accrued liability for the payment of interest and penalties	1.0		1.0		$ 0.1
Remaining unrecognized tax positions, that may be recognized in the next twelve months	$ 0.6		$ 0.6

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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) - Jun. 30, 2015 - USD ($) $ in Thousands	Total
Finite-Lived Intangible Assets [Line Items]
Expected Amortization Expense-Remainder of 2015	$ 1,605
Expected Amortization Expense-2016	2,574
Expected Amortization Expense-2017	1,830
Expected Amortization Expense-2018	846
Expected Amortization Expense-2019	665
Expected Amortization Expense-2020	$ 452
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	1 year 3 months 18 days
Expected Amortization Expense-Remainder of 2015	$ 149
Expected Amortization Expense-2016	260
Expected Amortization Expense-2017	0
Expected Amortization Expense-2018	0
Expected Amortization Expense-2019	0
Expected Amortization Expense-2020	$ 0
Patents, trademarks and tradename
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	2 years 10 months 24 days
Expected Amortization Expense-Remainder of 2015	$ 20
Expected Amortization Expense-2016	40
Expected Amortization Expense-2017	40
Expected Amortization Expense-2018	17
Expected Amortization Expense-2019	0
Expected Amortization Expense-2020	$ 0
Customer relationships and contracts
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years 7 months 6 days
Expected Amortization Expense-Remainder of 2015	$ 1,237
Expected Amortization Expense-2016	1,876
Expected Amortization Expense-2017	1,392
Expected Amortization Expense-2018	431
Expected Amortization Expense-2019	341
Expected Amortization Expense-2020	$ 231
Developed technology
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	15 years 6 months
Expected Amortization Expense-Remainder of 2015	$ 199
Expected Amortization Expense-2016	398
Expected Amortization Expense-2017	398
Expected Amortization Expense-2018	398
Expected Amortization Expense-2019	324
Expected Amortization Expense-2020	$ 221

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OTHER BALANCE SHEET INFORMATION - Other Noncurrent Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Other non-current assets:
Deferred tax assets	$ 32,875	$ 35,238
Reinsurance receivable	9,561	9,537
Deposits	9,457	10,125
Equity method investments	1,000	987
Property and equipment held for sale	3,631	0
Other	386	584
Total	$ 56,910	$ 56,471

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator
Net loss	$ (65,379)	$ (52,196)	$ (125,055)	$ (64,095)
Denominator
Weighted Average Number of Shares Outstanding, Basic and Diluted	156,347	153,496	155,586	153,157
Basic and diluted (per share)	$ (0.42)	$ (0.34)	$ (0.80)	$ (0.42)

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Current assets	$ 521,378	$ 433,795
Property and equipment, net	1,137,534	1,235,258
Goodwill	561,039	582,739
Intercompany notes and accounts receivable and investment in subsidiaries	0	0
Other assets	69,827	70,971
TOTAL ASSETS	2,289,778	2,322,763	$ 2,445,108
LIABILITIES AND EQUITY
Current liabilities	157,939	241,858
Long-term debt	961,080	737,691
Intercompany notes and accounts payable	0	0
Deferred tax liabilities	178,263	228,394
Other Liabilities Noncurrent Other	55,598	56,757
Equity	936,898	1,058,063	$ 1,188,666	$ 1,251,093
TOTAL LIABILITIES AND EQUITY	2,289,778	2,322,763
Parent Company
ASSETS
Current assets	213,786	39,020
Property and equipment, net	0	0
Goodwill	0	0
Intercompany notes and accounts receivable and investment in subsidiaries	3,047,124	3,170,874
Other assets	0	0
TOTAL ASSETS	3,260,910	3,209,894
LIABILITIES AND EQUITY
Current liabilities	21,018	22,046
Long-term debt	961,080	737,691
Intercompany notes and accounts payable	1,162,648	1,162,648
Deferred tax liabilities	178,008	228,199
Other Liabilities Noncurrent Other	1,276	1,264
Equity	936,880	1,058,046
TOTAL LIABILITIES AND EQUITY	3,260,910	3,209,894
Guarantor Subsidiaries
ASSETS
Current assets	262,473	341,188
Property and equipment, net	1,059,966	1,128,776
Goodwill	556,658	578,358
Intercompany notes and accounts receivable and investment in subsidiaries	1,228,949	1,426,160
Other assets	51,928	56,664
TOTAL ASSETS	3,159,974	3,531,146
LIABILITIES AND EQUITY
Current liabilities	115,315	192,079
Long-term debt	0	0
Intercompany notes and accounts payable	2,710,438	2,696,051
Deferred tax liabilities	398	398
Other Liabilities Noncurrent Other	54,186	55,182
Equity	279,637	587,436
TOTAL LIABILITIES AND EQUITY	3,159,974	3,531,146
Non-Guarantor Subsidiaries
ASSETS
Current assets	45,119	53,587
Property and equipment, net	77,568	106,482
Goodwill	4,381	4,381
Intercompany notes and accounts receivable and investment in subsidiaries	49,976	42,352
Other assets	17,899	14,307
TOTAL ASSETS	194,943	221,109
LIABILITIES AND EQUITY
Current liabilities	21,606	27,733
Long-term debt	0	0
Intercompany notes and accounts payable	131,150	123,810
Deferred tax liabilities	(143)	(134)
Other Liabilities Noncurrent Other	136	311
Equity	42,194	69,389
TOTAL LIABILITIES AND EQUITY	194,943	221,109
Eliminations
ASSETS
Current assets	0	0
Property and equipment, net	0	0
Goodwill	0	0
Intercompany notes and accounts receivable and investment in subsidiaries	(4,326,049)	(4,639,386)
Other assets	0	0
TOTAL ASSETS	(4,326,049)	(4,639,386)
LIABILITIES AND EQUITY
Current liabilities	0	0
Long-term debt	0	0
Intercompany notes and accounts payable	(4,004,236)	(3,982,509)
Deferred tax liabilities	0	(69)
Other Liabilities Noncurrent Other	0	0
Equity	(321,813)	(656,808)
TOTAL LIABILITIES AND EQUITY	$ (4,326,049)	$ (4,639,386)

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LONG-TERM DEBT - Senior Secured Credit Facility (Details) - Period [Domain] - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 15,000,000		$ 15,000,000
Senior Secured Credit Facility revolving loans due 2016	0		$ 0		$ 70,000,000
Write off of Deferred Debt Issuance Cost	$ 800,000
2011 Credit Facility
Line of Credit Facility [Line Items]
Additional interest rate above Federal Funds rate			0.50%
Additional interest rate above one-month adjusted LIBOR			1.00%
Commitment fee minimum	0.50%		0.50%
Line Of Credit Facility Weighted Average Interest Rate During Period	3.14%	2.88%	3.15%	2.88%
Line of Credit Facility, 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.
2011 Credit Facility | L I B O R [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility Interest Rate Basis Points					2.25%
2011 Credit Facility | L I B O R [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility Interest Rate Basis Points					3.00%
2011 Credit Facility | Other Loans [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility Interest Rate Basis Points					1.25%
2011 Credit Facility | Other Loans [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Line Of Credit Facility Interest Rate Basis Points					2.00%
2011 Credit Facility | Amendment Of Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 400,000,000		$ 400,000,000
Line of Credit Facility, Expiration Date			Mar. 31, 2016

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ASSETS HELD FOR SALE

6 Months Ended

Jun. 30, 2015

ASSETS HELD FOR SALE [Abstract]

ASSETS HELD FOR SALE

ASSETS HELD FOR SALE

In April 2015, we announced our decision to exit markets in which we participate outside of North America. Our strategy is to sell or relocate the assets of the businesses operating in these markets. During the second quarter of 2015, certain assets of our Oman business unit, which is included in our International reporting segment, met the criteria for assets held for sale. We expect the sale of these assets to occur before the end of 2015. We recorded a $21.4 million impairment of fixed assets to reduce the carrying value of these assets to the fair market value. The assets held for sale includes $3.6 million of property and equipment, net, and $0.6 million of inventories which are included in other non-current assets and other current assets, respectively, on our June 30, 2015 condensed consolidated balance sheet.

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Unaudited Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	$ 197,496	$ 350,595	$ 465,295	$ 706,736
Direct operating expense	158,841	262,883	363,371	521,185
Depreciation and amortization expense	45,896	52,184	93,107	103,279
General and administrative expense	50,710	57,881	118,354	110,747
Impairment expense	21,352	28,687	43,052	28,687
Operating loss	(79,303)	(51,040)	(152,589)	(57,162)
Interest expense, net of amounts capitalized	17,058	13,426	30,400	26,980
Other expense (income), net	(248)	(2,733)	4,184	(2,802)
Loss before income taxes	(96,113)	(61,733)	(187,173)	(81,340)
Income tax expense (benefit)	30,734	9,537	62,118	17,245
Net loss	65,379	52,196	125,055	64,095
Parent Company
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	0	0	0	0
Direct operating expense	0	0	0	0
Depreciation and amortization expense	0	0	0	0
General and administrative expense	186	242	407	478
Impairment expense	0	0	0	0
Operating loss	(186)	(242)	(407)	(478)
Interest expense, net of amounts capitalized	17,058	13,402	30,400	26,954
Other expense (income), net	(582)	(618)	(900)	(1,289)
Loss before income taxes	(16,662)	(13,026)	(29,907)	(26,143)
Income tax expense (benefit)	30,756	7,977	61,618	10,983
Net loss	(14,094)	5,049	(31,711)	15,160
Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	185,061	326,835	434,468	657,310
Direct operating expense	148,714	245,267	338,340	481,925
Depreciation and amortization expense	43,085	48,702	87,524	96,465
General and administrative expense	48,159	55,459	113,794	105,007
Impairment expense	0	0	21,700	0
Operating loss	(54,897)	(22,593)	(126,890)	(26,087)
Interest expense, net of amounts capitalized	0	(1)	0	(1)
Other expense (income), net	445	(572)	4,486	(1,296)
Loss before income taxes	(55,342)	(22,020)	(131,376)	(24,790)
Income tax expense (benefit)	(74)	2,094	3	5,843
Net loss	55,416	19,926	131,373	18,947
Non-Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	15,118	30,272	38,069	63,553
Direct operating expense	11,325	20,632	28,620	45,684
Depreciation and amortization expense	2,811	3,482	5,583	6,814
General and administrative expense	3,842	5,623	7,793	12,957
Impairment expense	21,352	28,687	21,352	28,687
Operating loss	(24,212)	(28,152)	(25,279)	(30,589)
Interest expense, net of amounts capitalized	0	25	0	27
Other expense (income), net	(126)	(1,564)	583	(248)
Loss before income taxes	(24,086)	(26,613)	(25,862)	(30,368)
Income tax expense (benefit)	52	(534)	497	419
Net loss	24,034	27,147	25,365	29,949
Eliminations
Schedule of Condensed Consolidating Statement of Operations [Line Items]
REVENUES	(2,683)	(6,512)	(7,242)	(14,127)
Direct operating expense	(1,198)	(3,016)	(3,589)	(6,424)
Depreciation and amortization expense	0	0	0	0
General and administrative expense	(1,477)	(3,443)	(3,640)	(7,695)
Impairment expense	0	0	0	0
Operating loss	(8)	(53)	(13)	(8)
Interest expense, net of amounts capitalized	0	0	0	0
Other expense (income), net	15	21	15	31
Loss before income taxes	(23)	(74)	(28)	(39)
Income tax expense (benefit)	0	0	0	0
Net loss	$ 23	$ 74	$ 28	$ 39

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GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Goodwill [Line Items]
Indefinite-lived trade names	$ 2,700			$ 2,700
Goodwill impairment				21,700
Amortization of intangible assets	$ 800		$ 2,600	1,600	$ 5,200
Coiled Tubing Services
Goodwill [Line Items]
Goodwill impairment		$ 19,100		$ 21,700

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EARNINGS (LOSS) PER SHARE (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The components of our loss per share are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(in thousands, except per share amounts)
Basic and Diluted EPS Calculation:
Numerator
Net loss	$	(65,379	)	$	(52,196	)	$	(125,055	)	$	(64,095	)
Denominator
Weighted average shares outstanding	$	156,347		$	153,496		$	155,586		153,157
Basic and diluted loss per share	$	(0.42	)	$	(0.34	)	$	(0.80	)	$	(0.42	)

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OTHER INCOME, NET (Tables)

6 Months Ended

Jun. 30, 2015

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,
	2015			2014			2015			2014
	(in thousands)
Interest income	$	(25	)	$	(30	)	$	(40	)	$	(48	)
Foreign exchange (gain) loss	333			(1,377		)	1,593			(11		)
Allowance for collectibility of notes receivable	—			—			3,950			—
Other, net	(556		)	(1,326		)	(1,319		)	(2,743		)
Total	$	(248	)	$	(2,733	)	$	4,184		$	(2,802	)

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TRANSACTIONS WITH RELATED PARTIES - Additional Information (Details) - Outside directors - Anadarko - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Related Party Transaction [Line Items]
Transactions with related party, revenue	$ 2.7	$ 9.3	$ 7.8	$ 18.1
Transactions with related party, receivables	$ 1.0		$ 1.0		$ 2.9

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LONG-TERM DEBT - Schedule of Debt (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
6.75% Senior Notes due 2021	$ 675,000,000	$ 675,000,000
Senior Secured Credit Facility revolving loans due 2016	0	70,000,000
Debt issuance costs and unamortized premium (discount) on debt, net	25,770,000	(7,309,000)
Total debt	964,230,000	737,691,000
Current portion of long-term debt	(3,150,000)	0
Long-term debt	961,080,000	737,691,000
Term Loan Facilities due 2020 [Member]
Debt Instrument [Line Items]
Term Loan Facility due 2020	$ 315,000,000	$ 0

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2015

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 the 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	Performance Units Earned as a Percentage of Target
First	200	%
Second	180	%
Third	160	%
Fourth	140	%
Fifth	120	%
Sixth	100	%
Seventh	0	%
Eighth	0	%
Ninth	0	%
Tenth	0	%
Eleventh	0	%
Twelfth	0	%

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2015

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, 2015 and December 31, 2014.

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, 2015				December 31, 2014
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	$	3,755	$	3,755	$	8,300	$	8,300
Financial liabilities:
6.75% Senior Notes due 2021	$	675,000	$	399,938	$	675,000	$	413,438
Term Loan Facility due 2020	315,000		315,000		—		—
Credit Facility revolving loans	—		—		70,000		70,000

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

6 Months Ended

Jun. 30, 2015

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 2014 Form 10-K.

Recent Accounting Developments

ASU 2015-03. In April 2015, the FASB issued ASU 2015-03,Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The objective of this ASU is to simplify presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. We adopted ASU 2015-03 in the second quarter of 2015 using the retrospective transition method. As a result, $10.7 million of unamortized deferred financing costs on our December 31, 2014 balance sheet was reclassified from non-current assets to a direct deduction of long-term debt. The adoption of this standard did not affect our results of operations or cash flows.

ASU 2014-09. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The objective of this ASU is to establish the principles to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue from contracts with customers. The core principle is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 must be adopted using either a full retrospective method or a modified retrospective method. During a July 2015 meeting, the FASB affirmed a proposal to defer the effective date of the new revenue standard for all entities by one year. As a result, ASU 2014-09 is effective for the Company for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. We are currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements.

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2015

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, 2015 and 2014 (in thousands):

As of and for the three months ended June 30, 2015
	U.S. Rig Services			Fluid Management Services			Coiled Tubing Services			Fishing and Rental Services			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	93,253		$	39,178		$	21,609		$	28,142		$	15,314		$	—		$	—		$	197,496
Intersegment revenues	196			421			—			1,447			798			542			(3,404		)	—
Depreciation and amortization	14,975			6,525			5,841			8,982			6,507			3,066			—			45,896
Impairment expense	—			—			—			—			21,352			—			—			21,352
Other operating expenses	82,410			32,712			19,851			25,734			16,326			32,518			—			209,551
Operating loss	(4,132		)	(59		)	(4,083		)	(6,574		)	(28,871		)	(35,584		)	—			(79,303		)
Interest expense, net of amounts capitalized	—			—			—			—			—			17,058			—			17,058
Loss before income taxes	(4,067		)	(41		)	(4,074		)	(6,574		)	(28,919		)	(52,438		)	—			(96,113		)
Long-lived assets(1)	796,551			171,058			166,931			319,480			221,832			245,188			(152,640		)	1,768,400
Total assets	1,609,569			299,670			251,201			658,464			371,152			(481,597		)	(418,681		)	2,289,778
Capital expenditures, excluding acquisitions	3,201			2,506			2,007			2,124			1,509			2,333			—			13,680

As of and for the three months ended June 30, 2014
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	169,980	$	62,087	$	43,108		$	49,340	$	26,080		$	—		$	—		$	350,595
Intersegment revenues	167		32		—			—		2,547			543			(3,289		)	—
Depreciation and amortization	14,630		8,255		5,968			12,088		7,795			3,448			—			52,184
Impairment expense	—		—		—			—		28,687			—			—			28,687
Other operating expenses	132,389		52,874		37,722			36,449		26,444			34,886			—			320,764
Operating income (loss)	22,961		958		(582		)	803		(36,846		)	(38,334		)	—			(51,040		)
Interest expense, net of amounts capitalized	—		—		(1		)	—		26			13,401			—			13,426
Income (loss) before income taxes	23,520		1,183		(392		)	981		(35,289		)	(51,736		)	—			(61,733		)
Long-lived assets(1)	774,613		208,563		232,228			412,033		269,153			256,298			(160,271		)	1,992,617
Total assets	1,565,553		285,746		255,615			649,739		436,067			(358,680		)	(388,932		)	2,445,108
Capital expenditures, excluding acquisitions	25,759		896		2,000			7,691		1,796			2,762			—			40,904

As of and for the six months ended June 30, 2015
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	214,075	$	89,933	$	52,626		$	70,832		$	37,829		$	—		$	—		$	465,295
Intersegment revenues	459		729		—			3,249			2,165			1,084			(7,686		)	—
Depreciation and amortization	29,685		14,247		11,608			17,946			13,336			6,285			—			93,107
Impairment expense	—		—		21,700			—			21,352			—			—			43,052
Other operating expenses	180,522		74,269		47,223			59,516			41,623			78,572			—			481,725
Operating income (loss)	3,868		1,417		(27,905		)	(6,630		)	(38,482		)	(84,857		)	—			(152,589		)
Interest expense, net of amounts capitalized	—		—		—			—			—			30,400			—			30,400
Income (loss) before income taxes	3,965		1,483		(27,894		)	(6,800		)	(39,550		)	(118,377		)	—			(187,173		)
Long-lived assets(1)	796,551		171,058		166,931			319,480			221,832			245,188			(152,640		)	1,768,400
Total assets	1,609,569		299,670		251,201			658,464			371,152			(481,597		)	(418,681		)	2,289,778
Capital expenditures, excluding acquisitions	12,862		3,800		4,121			5,619			2,875			3,398			—			32,675

As of and for the six months ended June 30, 2014
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	334,731	$	123,675	$	87,603		$	102,550	$	58,177		$	—		$	—		$	706,736
Intersegment revenues	290		144		—			—		4,768			1,085			(6,287		)	—
Depreciation and amortization	28,791		16,433		11,805			24,615		15,699			5,936			—			103,279
Impairment expense	—		—		—			—		28,687			—			—			28,687
Other operating expenses	258,637		103,937		70,242			74,302		61,128			63,686			—			631,932
Operating income (loss)	47,303		3,305		5,556			3,633		(47,337		)	(69,622		)	—			(57,162		)
Interest expense, net of amounts capitalized	—		—		(1		)	—		28			26,953			—			26,980
Income (loss) before income taxes	48,244		3,698		5,843			3,929		(47,237		)	(95,817		)	—			(81,340		)
Long-lived assets(1)	774,613		208,563		232,228			412,033		269,153			256,298			(160,271		)	1,992,617
Total assets	1,565,553		285,746		255,615			649,739		436,067			(358,680		)	(388,932		)	2,445,108
Capital expenditures, excluding acquisitions	43,896		1,758		3,497			11,155		3,670			5,453			—			69,429

(1) Long-lived assets include fixed assets, goodwill, intangibles and other non-current assets.

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

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GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Amount of Goodwill (Details) - USD ($)	3 Months Ended	6 Months Ended
	Dec. 31, 2014	Jun. 30, 2015
Goodwill [Roll Forward]
December 31, 2014		$ 582,739,000
Goodwill impairment		(21,700,000)
June 30, 2015	$ 582,739,000	561,039,000
U.S. Rig Services
Goodwill [Roll Forward]
December 31, 2014		297,719,000
Goodwill impairment		0
June 30, 2015	297,719,000	297,719,000
Fluid Management Services
Goodwill [Roll Forward]
December 31, 2014		24,479,000
Goodwill impairment		0
June 30, 2015	24,479,000	24,479,000
Coiled Tubing Services
Goodwill [Roll Forward]
December 31, 2014		82,695,000
Goodwill impairment	(19,100,000)	(21,700,000)
June 30, 2015	82,695,000	60,995,000
Fishing and Rental Services
Goodwill [Roll Forward]
December 31, 2014		173,463,000
Goodwill impairment		0
June 30, 2015	173,463,000	173,463,000
International
Goodwill [Roll Forward]
December 31, 2014		4,383,000
Goodwill impairment		0
June 30, 2015	$ 4,383,000	$ 4,383,000

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EARNINGS PER SHARE - Additional Information (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Stock Option
Antidilutive Securiites Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1.3	1.3	1.3	1.4
Stock Appreciation Rights (SARs)
Antidilutive Securiites Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0.3	0.3		0.3

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 225,481	$ 27,304
Accounts receivable, net of allowance for doubtful accounts of $4,973 and $2,925, respectively	181,234	289,466
Inventories	35,143	30,171
Other current assets	79,520	86,854
Total current assets	521,378	433,795
Property and equipment	2,548,319	2,555,515
Accumulated depreciation	(1,410,785)	(1,320,257)
Property and equipment, net	1,137,534	1,235,258
Goodwill	561,039	582,739
Other intangible assets, net	12,917	14,500
Other non-current assets	56,910	56,471
TOTAL ASSETS	2,289,778	2,322,763
Current liabilities:
Accounts payable	44,566	77,631
Current portion of long-term debt	3,150	0
Other current liabilities	110,223	164,227
Total current liabilities	157,939	241,858
Long-term debt	961,080	737,691
Workers' compensation, vehicular and health insurance liabilities	28,593	29,690
Deferred tax liabilities	178,263	228,394
Other non-current liabilities	$ 27,005	$ 27,067
Commitments and contingencies
Equity:
Common stock, $0.10 par value; 200,000,000 shares authorized, 157,654,235 and 153,557,108 shares issued and outstanding	$ 15,765	$ 15,356
Additional paid-in capital	963,612	960,647
Accumulated other comprehensive loss	(36,764)	(37,280)
Retained earnings (deficit)	(5,715)	119,340
Total equity	936,898	1,058,063
TOTAL LIABILITIES AND EQUITY	$ 2,289,778	$ 2,322,763

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LONG-TERM DEBT - 6.75% Senior Notes due 2021 (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Mar. 04, 2011
Debt Instrument [Line Items]
6.75% Senior Notes due 2021	$ 675,000,000	$ 675,000,000
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, 2016
Debt Instrument [Line Items]
Senior notes, call feature	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. The premium is the excess of (i) the present value of the redemption price of 103.375% of the principal amount, plus all remaining scheduled interest payments due through March 1, 2016 discounted at the treasury rate plus 0.5% over (ii) the principal amount of the note. 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	103.375%
Additional interest rate above Federal Funds rate	0.50%
Debt purchase price percent of principal amount	101.00%
Senior Notes | Senior Notes 6.75 Percent Due 2021
Debt Instrument [Line Items]
Debt stated percentage			6.75%
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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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (125,055)	$ (64,095)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	93,107	103,279
Impairment expense	43,052	28,687
Bad debt expense	1,362	1,151
Accretion of asset retirement obligations	309	294
Loss (income) from equity method investments	(13)	79
Amortization and write-off of deferred financing costs and premium	2,061	1,121
Deferred income tax benefit	(12,546)	(7,707)
Loss on disposal of assets, net	4,374	3,452
Share-based compensation	6,636	7,101
Excess tax expense from share-based compensation	2,950	1,221
Changes in working capital:
Accounts receivable	106,829	46,970
Other current assets	6,602	(2,419)
Accounts payable, accrued interest and accrued expenses	(88,277)	(13,781)
Share-based compensation liability awards	1,119	1,587
Other assets and liabilities	(43,708)	328
Net cash provided by (used in) operating activities	(1,198)	107,268
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(32,675)	(69,429)
Proceeds from sale of fixed assets	9,950	7,239
Proceeds from notes receivable	595	2,150
Net cash used in investing activities	(22,130)	(60,040)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt	0	(3,573)
Proceeds from long-term debt	305,550	0
Proceeds from borrowings on revolving credit facility	130,000	115,000
Repayments on revolving credit facility	(200,000)	(160,000)
Payment of deferred financing costs	(11,072)	0
Repurchases of common stock	(312)	(2,211)
Excess tax expense from share-based compensation	(2,950)	(1,221)
Net cash provided by (used in) financing activities	221,216	(52,005)
Effect of changes in exchange rates on cash	289	(81)
Net increase (decrease) in cash and cash equivalents	198,177	(4,858)
Cash and cash equivalents, beginning of period	27,304	28,306
Cash and cash equivalents, end of period	$ 225,481	$ 23,448

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SEGMENT INFORMATION - Additional Information (Details) - Jun. 30, 2015 - ft	Total
Segment Reporting Information [Line Items]
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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EQUITY (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period (in shares)			153,557,108
Balance at end of period (in shares)	157,654,235		157,654,235
Balance at beginning of period			$ 1,058,063	$ 1,251,093
Foreign currency translation	$ 1,213	$ 3,264	516	(2,001)
Common stock purchases			(312)	(2,211)
Share-based compensation			6,636	7,101
Tax expense from share-based compensation			(2,950)	(1,221)
Net loss	(65,379)	(52,196)	(125,055)	(64,095)
Balance at end of period	$ 936,898	$ 1,188,666	$ 936,898	$ 1,188,666
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period (in shares)			153,557,000	152,331,000
Common stock purchases (in shares)			(145,000)	(283,000)
Share-based compensation (in shares)			4,242,000	1,537,000
Balance at end of period (in shares)	157,654,000	153,585,000	157,654,000	153,585,000
Balance at beginning of period			$ 15,356	$ 15,233
Common stock purchases			(15)	(28)
Share-based compensation			424	154
Balance at end of period	$ 15,765	$ 15,359	15,765	15,359
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period			960,647	953,306
Common stock purchases			(297)	(2,183)
Share-based compensation			6,212	6,947
Tax expense from share-based compensation			(2,950)	(1,221)
Balance at end of period	963,612	956,849	963,612	956,849
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period			(37,280)	(15,414)
Foreign currency translation			516	(2,001)
Balance at end of period	(36,764)	(17,415)	(36,764)	(17,415)
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance at beginning of period			119,340	297,968
Net loss			(125,055)	(64,095)
Balance at end of period	$ (5,715)	$ 233,873	$ (5,715)	$ 233,873

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2015

Condensed Consolidating Financial Statements [Abstract]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Our 2021 Notes, ABL Facility and Term Loan Facility are guaranteed by virtually all 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 UNAUDITED BALANCE SHEETS
	June 30, 2015
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	213,786	$	262,473	$	45,119		$	—		$	521,378
Property and equipment, net	—		1,059,966		77,568			—			1,137,534
Goodwill	—		556,658		4,381			—			561,039
Intercompany notes and accounts receivable and investment in subsidiaries	3,047,124		1,228,949		49,976			(4,326,049		)	—
Other assets	—		51,928		17,899			—			69,827
TOTAL ASSETS	$	3,260,910	$	3,159,974	$	194,943		$	(4,326,049	)	$	2,289,778
Liabilities and equity:
Current liabilities	$	21,018	$	115,315	$	21,606		$	—		$	157,939
Long-term debt	961,080		—		—			—			961,080
Intercompany notes and accounts payable	1,162,648		2,710,438		131,150			(4,004,236		)	—
Deferred tax liabilities	178,008		398		(143		)	—			178,263
Other long-term liabilities	1,276		54,186		136			—			55,598
Equity	936,880		279,637		42,194			(321,813		)	936,898
TOTAL LIABILITIES AND EQUITY	$	3,260,910	$	3,159,974	$	194,943		$	(4,326,049	)	$	2,289,778

CONDENSED CONSOLIDATING BALANCE SHEETS
	December 31, 2014
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Assets:
Current assets	$	39,020	$	341,188	$	53,587		$	—		$	433,795
Property and equipment, net	—		1,128,776		106,482			—			1,235,258
Goodwill	—		578,358		4,381			—			582,739
Intercompany notes and accounts receivable and investment in subsidiaries	3,170,874		1,426,160		42,352			(4,639,386		)	—
Other assets	—		56,664		14,307			—			70,971
TOTAL ASSETS	$	3,209,894	$	3,531,146	$	221,109		$	(4,639,386	)	$	2,322,763
Liabilities and equity:
Current liabilities	$	22,046	$	192,079	$	27,733		$	—		$	241,858
Long-term debt	737,691		—		—			—			737,691
Intercompany notes and accounts payable	1,162,648		2,696,051		123,810			(3,982,509		)	—
Deferred tax liabilities	228,199		398		(134		)	(69		)	228,394
Other long-term liabilities	1,264		55,182		311			—			56,757
Equity	1,058,046		587,436		69,389			(656,808		)	1,058,063
TOTAL LIABILITIES AND EQUITY	$	3,209,894	$	3,531,146	$	221,109		$	(4,639,386	)	$	2,322,763

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	185,061		$	15,118		$	(2,683	)	$	197,496
Direct operating expense	—			148,714			11,325			(1,198		)	158,841
Depreciation and amortization expense	—			43,085			2,811			—			45,896
General and administrative expense	186			48,159			3,842			(1,477		)	50,710
Impairment expense	—			—			21,352			—			21,352
Operating loss	(186		)	(54,897		)	(24,212		)	(8		)	(79,303		)
Interest expense, net of amounts capitalized	17,058			—			—			—			17,058
Other (income) loss, net	(582		)	445			(126		)	15			(248		)
Loss before income taxes	(16,662		)	(55,342		)	(24,086		)	(23		)	(96,113		)
Income tax (expense) benefit	30,756			(74		)	52			—			30,734
Net income (loss)	$	14,094		$	(55,416	)	$	(24,034	)	$	(23	)	$	(65,379	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Three Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	326,835		$	30,272		$	(6,512	)	$	350,595
Direct operating expense	—			245,267			20,632			(3,016		)	262,883
Depreciation and amortization expense	—			48,702			3,482			—			52,184
General and administrative expense	242			55,459			5,623			(3,443		)	57,881
Impairment expense	—			—			28,687			—			28,687
Operating loss	(242		)	(22,593		)	(28,152		)	(53		)	(51,040		)
Interest expense, net of amounts capitalized	13,402			(1		)	25			—			13,426
Other income, net	(618		)	(572		)	(1,564		)	21			(2,733		)
Loss before income taxes	(13,026		)	(22,020		)	(26,613		)	(74		)	(61,733		)
Income tax (expense) benefit	7,977			2,094			(534		)	—			9,537
Net loss	$	(5,049	)	$	(19,926	)	$	(27,147	)	$	(74	)	$	(52,196	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	434,468		$	38,069		$	(7,242	)	$	465,295
Direct operating expense	—			338,340			28,620			(3,589		)	363,371
Depreciation and amortization expense	—			87,524			5,583			—			93,107
General and administrative expense	407			113,794			7,793			(3,640		)	118,354
Impairment expense	—			21,700			21,352			—			43,052
Operating loss	(407		)	(126,890		)	(25,279		)	(13		)	(152,589		)
Interest expense, net of amounts capitalized	30,400			—			—			—			30,400
Other (income) loss, net	(900		)	4,486			583			15			4,184
Loss before income taxes	(29,907		)	(131,376		)	(25,862		)	(28		)	(187,173		)
Income tax benefit	61,618			3			497			—			62,118
Net income (loss)	$	31,711		$	(131,373	)	$	(25,365	)	$	(28	)	$	(125,055	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF OPERATIONS
	Six Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	657,310		$	63,553		$	(14,127	)	$	706,736
Direct operating expense	—			481,925			45,684			(6,424		)	521,185
Depreciation and amortization expense	—			96,465			6,814			—			103,279
General and administrative expense	478			105,007			12,957			(7,695		)	110,747
Impairment expense	—			—			28,687			—			28,687
Operating loss	(478		)	(26,087		)	(30,589		)	(8		)	(57,162		)
Interest expense, net of amounts capitalized	26,954			(1		)	27			—			26,980
Other income, net	(1,289		)	(1,296		)	(248		)	31			(2,802		)
Loss before income taxes	(26,143		)	(24,790		)	(30,368		)	(39		)	(81,340		)
Income tax benefit	10,983			5,843			419			—			17,245
Net loss	$	(15,160	)	$	(18,947	)	$	(29,949	)	$	(39	)	$	(64,095	)

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2015
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	—		$	(6,317	)	$	5,119		$	—		$	(1,198	)
Cash flows from investing activities:
Capital expenditures	—			(31,435		)	(1,240		)	—			(32,675		)
Intercompany notes and accounts	—			41,993			—			(41,993		)	—
Other investing activities, net	—			10,545			—			—			10,545
Net cash provided by (used in) investing activities	—			21,103			(1,240		)	(41,993		)	(22,130		)
Cash flows from financing activities:
Proceeds from long-term debt	305,550			—			—			—			305,550
Proceeds from borrowings on revolving credit facility	130,000			—			—			—			130,000
Repayments on revolving credit facility	(200,000		)	—			—			—			(200,000		)
Payment of deferred financing costs	(11,072		)	—			—			—			(11,072		)
Repurchases of common stock	(312		)	—			—			—			(312		)
Intercompany notes and accounts	(41,993		)	—			—			41,993			—
Other financing activities, net	(2,950		)	—			—			—			(2,950		)
Net cash provided by financing activities	179,223			—			—			41,993			221,216
Effect of changes in exchange rates on cash	—			—			289			—			289
Net increase in cash and cash equivalents	179,223			14,786			4,168			—			198,177
Cash and cash equivalents at beginning of period	19,949			450			6,905			—			27,304
Cash and cash equivalents at end of period	$	199,172		$	15,236		$	11,073		$	—		$	225,481

CONDENSED CONSOLIDATING UNAUDITED STATEMENTS OF CASH FLOWS
	Six Months Ended June 30, 2014
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net cash provided by operating activities	$	—		$	100,170		$	7,098		$	—		$	107,268
Cash flows from investing activities:
Capital expenditures	—			(66,280		)	(3,149		)	—			(69,429		)
Intercompany notes and accounts	—			(41,350		)	—			41,350			—
Other investing activities, net	—			9,389			—			—			9,389
Net cash used in investing activities	—			(98,241		)	(3,149		)	41,350			(60,040		)
Cash flows from financing activities:
Repayments of long-term debt	(3,573		)	—			—			—			(3,573		)
Proceeds from borrowings on revolving credit facility	115,000			—			—			—			115,000
Repayments on revolving credit facility	(160,000		)	—			—			—			(160,000		)
Repurchases of common stock	(2,211		)	—			—			—			(2,211		)
Intercompany notes and accounts	41,350			—			—			(41,350		)	—
Other financing activities, net	(1,221		)	—			—			—			(1,221		)
Net cash used in financing activities	(10,655		)	—			—			(41,350		)	(52,005		)
Effect of changes in exchange rates on cash	—			—			(81		)	—			(81		)
Net increase (decrease) in cash and cash equivalents	(10,655		)	1,929			3,868			—			(4,858		)
Cash and cash equivalents at beginning of period	23,115			788			4,403			—			28,306
Cash and cash equivalents at end of period	$	12,460		$	2,717		$	8,271		$	—		$	23,448

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OTHER BALANCE SHEET INFORMATION - Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Other current assets:
Deferred tax assets	$ 14,688	$ 11,823
Prepaid current assets	21,770	28,218
Reinsurance receivable	9,131	9,200
VAT asset	17,452	18,889
Inventories held for sale	591	0
Other	15,888	18,724
Total	$ 79,520	$ 86,854

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EQUITY (Tables)

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Schedule of Stockholders Equity

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2015 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings (Deficit)			Total
	Number of Shares		Amount at Par
	(in thousands)
Balance at December 31, 2014	153,557		$	15,356		$	960,647		$	(37,280	)	$	119,340		$	1,058,063
Foreign currency translation	—		—			—			516			—			516
Common stock purchases	(145	)	(15		)	(297		)	—			—			(312		)
Share-based compensation	4,242		424			6,212			—			—			6,636
Tax expense from share-based compensation	—		—			(2,950		)	—			—			(2,950		)
Net loss	—		—			—			—			(125,055		)	(125,055		)
Balance at June 30, 2015	157,654		$	15,765		$	963,612		$	(36,764	)	$	(5,715	)	$	936,898

A reconciliation of the total carrying amount of our equity accounts for six months ended June 30, 2014 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
	Number of Shares		Amount at Par
	(in thousands)
Balance at December 31, 2013	152,331		$	15,233		$	953,306		$	(15,414	)	$	297,968		$	1,251,093
Foreign currency translation	—		—			—			(2,001		)	—			(2,001		)
Common stock purchases	(283	)	(28		)	(2,183		)	—			—			(2,211		)
Share-based compensation	1,537		154			6,947			—			—			7,101
Tax expense from share-based compensation	—		—			(1,221		)	—			—			(1,221		)
Net loss	—		—			—			—			(64,095		)	(64,095		)
Balance at June 30, 2014	153,585		$	15,359		$	956,849		$	(17,415	)	$	233,873		$	1,188,666

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GENERAL

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

GENERAL

Key Energy Services, Inc., and its wholly owned 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 of our 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, 2014 balance sheet was prepared from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 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 2014 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 six months endedJune 30, 2015 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 Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 4,973	$ 2,925
Common stock, shares issued	157,654,235	153,557,108
Common stock, shares outstanding	157,654,235	153,557,108
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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EARNINGS (LOSS) PER SHARE

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

LOSS PER SHARE

Basic loss per share is determined by dividing net loss attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted 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 loss per share are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(in thousands, except per share amounts)
Basic and Diluted EPS Calculation:
Numerator
Net loss	$	(65,379	)	$	(52,196	)	$	(125,055	)	$	(64,095	)
Denominator
Weighted average shares outstanding	$	156,347		$	153,496		$	155,586		153,157
Basic and diluted loss per share	$	(0.42	)	$	(0.34	)	$	(0.80	)	$	(0.42	)

Stock options, warrants and stock appreciation rights (“SARs”) are included in the computation of diluted loss 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, 2015 exclude the potential exercise of 1.3 million stock options and 0.3 million SARs as they would be anti-dilutive due to net loss during the period. The diluted earnings per share calculations for the three months ended June 30, 2014 exclude the potential exercise of 1.3 million stock options and 0.3 million SARs and for the six months ended June 30, 2014 exclude the potential exercise of 1.4 million stock options and 0.3 million SARs as they would be anti-dilutive due to net loss during the period. No events occurred after June 30, 2015 that would materially affect the number of weighted average shares outstanding.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 27, 2015
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, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Trading Symbol	KEG
Amendment Flag	false
Entity Common Stock, Shares Outstanding		157,583,222

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SHARE-BASED COMPENSATION

6 Months Ended

Jun. 30, 2015

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

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

We recognized employee share-based compensation expense of $2.1 million and $2.4 million during the three months endedJune 30, 2015 and 2014, respectively, and the related income tax benefit recognized was $0.7 million for the same periods. We recognized employee share-based compensation expense of $6.2 million and $7.1 million during the six months endedJune 30, 2015 and 2014, respectively, and the related income tax expense recognized was $2.2 million and $2.3 million, respectively, for the same period. We did not capitalize any share-based compensation during the three and six months ended June 30, 2015 and 2014.

The unrecognized compensation cost related to our unvested restricted stock as of June 30, 2015 is estimated to be $10.3 million and is expected to be recognized over a weighted-average period of 1.5 years. All outstanding stock options are vested and there are no unrecognized cost related to our stock options as of June 30, 2015. No phantom stock was outstanding as of June 30, 2015.

During May 2015, we issued 598,860 restricted stock units to our outside directors under the Key Energy Services, Inc. 2014 Equity and Cash Incentive Plan that was approved by our stockholders on May 15, 2014. These restricted stock units vested immediately and we recognized $1.6 million of expense related to these awards. Additionally, during May 2014, we recognized $1.6 million of expense related to similar awards.

In the first quarter of 2015, the Compensation Committee of the Board of Directors adopted both the 2014 Performance Award Agreement (“2014 PU Award Agreement”) under the Key Energy Services, Inc. 2014 Equity and Cash Incentive Plan (the “2014 Plan”) and the 2015 Performance Unit Plan (the “2015 PU Plan”). We believe that the 2015 PU Plan and 2014 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 2015, we issued 2.1 million performance units to our executive officers under the 2014 Plan with such material terms as set forth in the 2014 PU Award Agreement. In February 2015, we issued 0.4 million performance units to certain other employees under the 2015 PU Plan. The performance units are measured based on one three-year performance period from January 1, 2015 to December 31, 2017. The number of performance units that may be earned by a participant is determined at the end of the 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	Performance Units Earned as a Percentage of Target
First	200	%
Second	180	%
Third	160	%
Fourth	140	%
Fifth	120	%
Sixth	100	%
Seventh	0	%
Eighth	0	%
Ninth	0	%
Tenth	0	%
Eleventh	0	%
Twelfth	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, 2015, the fair value of outstanding performance units was $6.2 million, and is being accreted to compensation expense over the vesting terms of the awards. As of June 30, 2015, the unrecognized compensation cost related to our unvested performance units is estimated to be $4.8 million and is expected to be recognized over a weighted-average period of 2.4 years.

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Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
REVENUES	$ 197,496	$ 350,595	$ 465,295	$ 706,736
COSTS AND EXPENSES:
Direct operating expenses	158,841	262,883	363,371	521,185
Depreciation and amortization expense	45,896	52,184	93,107	103,279
General and administrative expenses	50,710	57,881	118,354	110,747
Impairment expense	21,352	28,687	43,052	28,687
Operating loss	(79,303)	(51,040)	(152,589)	(57,162)
Interest expense, net of amounts capitalized	17,058	13,426	30,400	26,980
Other (income) loss, net	(248)	(2,733)	4,184	(2,802)
Loss before income taxes	(96,113)	(61,733)	(187,173)	(81,340)
Income tax benefit	30,734	9,537	62,118	17,245
NET LOSS	$ (65,379)	$ (52,196)	$ (125,055)	$ (64,095)
Loss per share:
Basic and diluted (per share)	$ (0.42)	$ (0.34)	$ (0.80)	$ (0.42)
Weighted average shares outstanding:
Weighted Average Number of Shares Outstanding, Basic and Diluted	156,347	153,496	155,586	153,157

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2015

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, 2015 are as follows:

	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International		Total
	(in thousands)
December 31, 2014	$	297,719	$	24,479	$	82,695		$	173,463	$	4,383	$	582,739
Goodwill impairment	—		—		(21,700		)	—		—		(21,700		)
June 30, 2015	$	297,719	$	24,479	$	60,995		$	173,463	$	4,383	$	561,039

The components of our other intangible assets as of June 30, 2015 and December 31, 2014 are as follows:

	June 30, 2015			December 31, 2014
	(in thousands)
Noncompete agreements:
Gross carrying value	$	2,269		$	2,269
Accumulated amortization	(1,860		)	(1,710		)
Net carrying value	409			559
Patents, trademarks and tradenames:
Gross carrying value	3,129			3,106
Accumulated amortization	(283		)	(263		)
Net carrying value	2,846			2,843
Customer relationships and contracts:
Gross carrying value	59,079			59,045
Accumulated amortization	(53,571		)	(52,303		)
Net carrying value	5,508			6,742
Developed technology:
Gross carrying value	8,494			8,494
Accumulated amortization	(4,340		)	(4,138		)
Net carrying value	4,154			4,356
Customer backlog:
Gross carrying value	779			779
Accumulated amortization	(779		)	(779		)
Net carrying value	—			—
Total:
Gross carrying value	73,750			73,693
Accumulated amortization	(60,833		)	(59,193		)
Net carrying value	$	12,917		$	14,500

Of our intangible assets at June 30, 2015, $2.7 million are indefinite-lived tradenames and patents which are 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 2015		2016		2017		2018		2019		2020
		(in thousands)
Noncompete agreements	1.3	$	149	$	260	$	—	$	—	$	—	$	—
Trademarks	2.9	20		40		40		17		—		—
Customer relationships and contracts	3.6	1,237		1,876		1,392		431		341		231
Developed technology	15.5	199		398		398		398		324		221
Total expected intangible asset amortization expense		$	1,605	$	2,574	$	1,830	$	846	$	665	$	452

Certain of our other intangible assets are denominated in Russian Rubles 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 $0.8 million and $2.6 millionfor the three months endedJune 30, 2015 and 2014, respectively, and $1.6 million and $5.2 million for the six months endedJune 30, 2015 and 2014, respectively.

We perform an analysis of goodwill impairment on an annual basis unless an event occurs that triggers additional interim testing. The decline in market value of our stock during the fourth quarter of 2014 was determined to be a triggering event making it necessary to perform the first step of the goodwill impairment test for our U.S. Rig Services, Coiled Tubing Services, Fishing and Rental Services and Fluid Management Services segments. Based on the results of our step one analysis, the fair value of our U.S. Rig Services, Fluid Management Services and Fishing and Rental Services segments exceeded their carrying values, but the analysis indicated potential impairment in our Coiled Tubing Services segment. Step two of the goodwill impairment testing for the Coiled Tubing Services segment was performed preliminarily during the fourth quarter of 2014 and our analysis concluded that $19.1 million of goodwill was impaired. During the first quarter of 2015, we engaged outside consultants to assist us in finalizing our step two testing. Based on the additional analysis performed, we concluded that there was an additional $21.7 million of goodwill that was impaired.

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OTHER BALANCE SHEET INFORMATION

6 Months Ended

Jun. 30, 2015

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, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other current assets:
Deferred tax assets	$	14,688	$	11,823
Prepaid current assets	21,770		28,218
Reinsurance receivable	9,131		9,200
VAT asset	17,452		18,889
Current assets held for sale	591		—
Other	15,888		18,724
Total	$	79,520	$	86,854

The table below presents comparative detailed information about other non-current assets at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other non-current assets:
Deferred tax assets	$	32,875	$	35,238
Reinsurance receivable	9,561		9,537
Deposits	9,457		10,125
Equity method investments	1,000		987
Non-current assets held for sale	3,631		—
Other	386		584
Total	$	56,910	$	56,471

The table below presents comparative detailed information about other current liabilities at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other current liabilities:
Accrued payroll, taxes and employee benefits	$	19,394	$	32,477
Accrued operating expenditures	18,858		45,899
Income, sales, use and other taxes	17,546		25,892
Self-insurance reserve	30,448		31,359
Accrued interest	17,869		15,241
Accrued insurance premiums	1,189		7,515
Share-based compensation and other liabilities	4,919		5,844
Total	$	110,223	$	164,227

The table below presents comparative detailed information about other non-current liabilities at June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
	(in thousands)
Other non-current liabilities:
Asset retirement obligations	$	12,608	$	12,525
Environmental liabilities	5,531		5,730
Accrued rent	—		263
Accrued sales, use and other taxes	6,145		5,411
Other	2,721		3,138
Total	$	27,005	$	27,067

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Accounting Standards Not Yet Adopted in this Report

Recent Accounting Developments

ASU 2015-03. In April 2015, the FASB issued ASU 2015-03,Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The objective of this ASU is to simplify presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods, with early adoption permitted. We adopted ASU 2015-03 in the second quarter of 2015 using the retrospective transition method. As a result, $10.7 million of unamortized deferred financing costs on our December 31, 2014 balance sheet was reclassified from non-current assets to a direct deduction of long-term debt. The adoption of this standard did not affect our results of operations or cash flows.

ASU 2014-09. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The objective of this ASU is to establish the principles to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue from contracts with customers. The core principle is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 must be adopted using either a full retrospective method or a modified retrospective method. During a July 2015 meeting, the FASB affirmed a proposal to defer the effective date of the new revenue standard for all entities by one year. As a result, ASU 2014-09 is effective for the Company for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. We are currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements.

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TRANSACTIONS WITH RELATED PARTIES

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

TRANSACTIONS WITH RELATED PARTIES

TRANSACTIONS WITH RELATED PARTIES

Board of Director Relationships

A member of our board of directors is the Executive Vice President, General Counsel and Chief Administrative Officer of Anadarko Petroleum Corporation (“Anadarko”), which is one of our customers. Sales to Anadarko were approximately $2.7 million and $9.3 million for the three months ended June 30, 2015 and 2014, respectively, and $7.8 million and $18.1 million for the six months endedJune 30, 2015 and 2014, respectively. Receivables outstanding from Anadarko were approximately $1.0 million and $2.9 million as of June 30, 2015 and December 31, 2014, respectively. Transactions with Anadarko for our services are made on terms consistent with other customers.

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INCOME TAXES

6 Months Ended

Jun. 30, 2015

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 for the three months endedJune 30, 2015 and 2014 were 32.0% and 15.4%, respectively, and 33.2% and 21.2% for the six months endedJune 30, 2015 and 2014, 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, including goodwill impairment expense, 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 profits 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, 2015 and December 31, 2014, we had $1.0 million of unrecognized tax benefits, net of federal tax benefit, which, if recognized, would impact our effective tax rate. We recognized a tax expense of less than $0.1 million for the three months ended June 30, 2015 and 2014, related to these items. We have substantially concluded all U.S. federal and state tax matters through the year ended December 31, 2012.

We record interest and penalties related to unrecognized tax benefits as income tax expense. We have accrued a liability of $1.0 million for the payment of interest and penalties as of June 30, 2015 and December 31, 2014. We believe that it is reasonably possible that $0.6 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, 2015 and 2014.

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SEGMENT INFORMATION (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
		Jun. 30, 2015		Jun. 30, 2014	Jun. 30, 2015		Jun. 30, 2014		Dec. 31, 2014
Segment Reporting Information [Line Items]
Revenues from external customers		$ 197,496		$ 350,595	$ 465,295		$ 706,736
Intersegment revenues		0		0	0		0
Depreciation and amortization		45,896		52,184	93,107		103,279
Impairment expense		21,352		28,687	43,052		28,687
Other operating expenses		209,551		320,764	481,725		631,932
Operating loss		(79,303)		(51,040)	(152,589)		(57,162)
Interest expense, net of amounts capitalized		17,058		13,426	30,400		26,980
Loss before income taxes		(96,113)		(61,733)	(187,173)		(81,340)
Long-lived assets	[1]	1,768,400		1,992,617	1,768,400		1,992,617
Assets		2,289,778		2,445,108	2,289,778		2,445,108		$ 2,322,763
Capital expenditures, excluding acquisitions		13,680		40,904	32,675		69,429
U.S. Rig Services
Segment Reporting Information [Line Items]
Revenues from external customers		93,253		169,980	214,075		334,731
Intersegment revenues		196		167	459		290
Depreciation and amortization		14,975		14,630	29,685		28,791
Impairment expense		0		0	0		0
Other operating expenses		82,410		132,389	180,522		258,637
Operating loss		(4,132)		22,961	3,868		47,303
Interest expense, net of amounts capitalized		0		0	0		0
Loss before income taxes		(4,067)		23,520	3,965		48,244
Long-lived assets	[1]	796,551		774,613	796,551		774,613
Assets		1,609,569		1,565,553	1,609,569		1,565,553
Capital expenditures, excluding acquisitions		3,201		25,759	12,862		43,896
Fluid Management Services
Segment Reporting Information [Line Items]
Revenues from external customers		39,178		62,087	89,933		123,675
Intersegment revenues		421		32	729		144
Depreciation and amortization		6,525		8,255	14,247		16,433
Impairment expense		0		0	0		0
Other operating expenses		32,712		52,874	74,269		103,937
Operating loss		(59)		958	1,417		3,305
Interest expense, net of amounts capitalized		0		0	0		0
Loss before income taxes		(41)		1,183	1,483		3,698
Long-lived assets	[1]	171,058		208,563	171,058		208,563
Assets		299,670		285,746	299,670		285,746
Capital expenditures, excluding acquisitions		2,506		896	3,800		1,758
Coiled Tubing Services
Segment Reporting Information [Line Items]
Revenues from external customers		21,609		43,108	52,626		87,603
Intersegment revenues		0		0	0		0
Depreciation and amortization		5,841		5,968	11,608		11,805
Impairment expense		0		0	21,700		0
Other operating expenses		19,851		37,722	47,223		70,242
Operating loss		(4,083)		(582)	(27,905)		5,556
Interest expense, net of amounts capitalized		0		(1)	0		(1)
Loss before income taxes		(4,074)		(392)	(27,894)		5,843
Long-lived assets	[1]	166,931		232,228	166,931		232,228
Assets		251,201		255,615	251,201		255,615
Capital expenditures, excluding acquisitions		2,007		2,000	4,121		3,497
Fishing and Rental Services
Segment Reporting Information [Line Items]
Revenues from external customers		28,142		49,340	70,832		102,550
Intersegment revenues		1,447		0	3,249		0
Depreciation and amortization		8,982		12,088	17,946		24,615
Impairment expense		0		0	0		0
Other operating expenses		25,734		36,449	59,516		74,302
Operating loss		(6,574)		803	(6,630)		3,633
Interest expense, net of amounts capitalized		0		0	0		0
Loss before income taxes		(6,574)		981	(6,800)		3,929
Long-lived assets	[1]	319,480		412,033	319,480		412,033
Assets		658,464		649,739	658,464		649,739
Capital expenditures, excluding acquisitions		2,124		7,691	5,619		11,155
International
Segment Reporting Information [Line Items]
Revenues from external customers		15,314		26,080	37,829		58,177
Intersegment revenues		798		2,547	2,165		4,768
Depreciation and amortization		6,507		7,795	13,336		15,699
Impairment expense		21,352		28,687	21,352		28,687
Other operating expenses		16,326		26,444	41,623		61,128
Operating loss		(28,871)		(36,846)	(38,482)		(47,337)
Interest expense, net of amounts capitalized		0		26	0		28
Loss before income taxes		(28,919)		(35,289)	(39,550)		(47,237)
Long-lived assets	[1]	221,832		269,153	221,832		269,153
Assets		371,152		436,067	371,152		436,067
Capital expenditures, excluding acquisitions		1,509		1,796	2,875		3,670
Functional Support
Segment Reporting Information [Line Items]
Revenues from external customers	[2]	0		0	0		0
Intersegment revenues	[2]	542		543	1,084		1,085
Depreciation and amortization	[2]	3,066		3,448	6,285		5,936
Impairment expense		0	[2]	0	0	[2]	0
Other operating expenses	[2]	32,518		34,886	78,572		63,686
Operating loss		(35,584)	[2]	(38,334)	(84,857)	[2]	(69,622)	[2]
Interest expense, net of amounts capitalized	[2]	17,058		13,401	30,400		26,953
Loss before income taxes	[2]	(52,438)		(51,736)	(118,377)		(95,817)
Long-lived assets	[1],[2]	245,188		256,298	245,188		256,298
Assets	[2]	(481,597)		(358,680)	(481,597)		(358,680)
Capital expenditures, excluding acquisitions	[2]	2,333		2,762	3,398		5,453
Reconciling Eliminations
Segment Reporting Information [Line Items]
Revenues from external customers		0		0	0		0
Intersegment revenues		(3,404)		(3,289)	(7,686)		(6,287)
Depreciation and amortization		0		0	0		0
Impairment expense		0		0	0		0
Other operating expenses		0		0	0		0
Operating loss		0		0	0		0
Interest expense, net of amounts capitalized		0		0	0		0
Loss before income taxes		0		0	0		0
Long-lived assets	[1]	(152,640)		(160,271)	(152,640)		(160,271)
Assets		(418,681)		(388,932)	(418,681)		(388,932)
Capital expenditures, excluding acquisitions		$ 0		$ 0	$ 0		$ 0

[1] Long-lived assets include fixed assets, goodwill, intangibles and other non-current assets

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

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LONG-TERM DEBT

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

As of June 30, 2015 and December 31, 2014, the components of our long-term debt were as follows:

	June 30, 2015			December 31, 2014
	(in thousands)
6.75% Senior Notes due 2021	$	675,000		$	675,000
Term Loan Facility due 2020	315,000			—
Senior Secured Credit Facility revolving loans due 2016	—			70,000
Debt issuance costs and unamortized premium (discount) on debt, net	(25,770		)	(7,309		)
Total	964,230			737,691
Less current portion	(3,150		)	—
Long-term debt	$	961,080		$	737,691

6.75% Senior Notes due 2021

We have outstanding $675.0 million of 6.75% Senior Notes due 2021 (the “2021 Notes”). 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 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. The premium is the excess of (i) the present value of the redemption price of 103.375% of the principal amount, plus all remaining scheduled interest payments due through March 1, 2016 discounted at the treasury rate plus 0.5% over (ii) the principal amount of the note. 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 Facilities 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, 2015, the 2021 Notes were rated 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 investment rating assigned to the 2021 Notes later falls below investment grade. We were in compliance with these covenants as of June 30, 2015.

Credit Facilities due 2020

On June 1, 2015, we entered into a $100.0 million asset-based revolving credit facility (“ABL Facility”) due February 28, 2020 and a $315.0 million term loan facility (“Term Loan Facility”) due June 1, 2020 (together, the “Facilities”). The Facilities replaced our existing $400 million 2011 Credit Facility (defined below).

The ABL Facility bears interest at an annual rate on outstanding borrowings of LIBOR plus 4.5%, with a fee on unused commitments ranging from 1.00% to 1.25% based on utilization. The Term Loan Facility was issued at an original issue discount of 3.0% with an annual rate of LIBOR plus 9.25% with a 1.00% LIBOR floor and a quarterly principal payment of $787,500 that will begin in the third quarter of 2015. The original issue discount of $9.4 million and $11.1 million of deferred financing costs will be amortized over the term of the Facilities.

The Facilities contain customary representations and warranties and certain affirmative and negative covenants, including covenants that restrict our ability to take certain actions without the permission of the Facilities lenders or as permitted under the Facilities including the incurrence of debt, the granting of liens, the making of investments, the payment of dividends and the sale of assets. The Facilities also contain financial covenants requiring that we maintain an asset coverage ratio of at least 1.5 to 1.0 and that liquidity, as defined in the Facilities agreements, must not be less than $100.0 million. The ABL also includes a fixed charge coverage ratio of at least 1.0 to 1.0, which is tested only if excess availability under the ABL falls below a specified threshold or upon the occurrence of certain other events. Additionally, in certain situations, we may be required to offer to prepay some principal amounts under the Term Loan Facility including 50% of our fiscal excess cash flow, as defined in the Term Loan Facility agreement.

We were in compliance with covenants of the Facilities as of June 30, 2015. As of June 30, 2015, we have no borrowings outstanding under the ABL Facility and $48.2 million of letters of credit outstanding with borrowing capacity of $44.4 million available subject to covenant constraints under our ABL Facility.

The weighted average interest rates on the outstanding borrowings under the ABL Facility and Term Loan Facility for the three and six month periods ended June 30, 2015 were as follows:

	June 30, 2015
	(in thousands)
ABL Facility	—
Term Loan Facility	10.38	%

Senior Secured Credit Facility

On June 1, 2015, in connection with entering into the ABL Facility and the Term Loan Facility, we terminated our senior secured revolving bank credit facility, dated as of March 31, 2011, as amended through December 5, 2014 (the “2011 Credit Facility”), which was scheduled to mature no later than March 31, 2016. The 2011 Credit Facility provided for a senior secured credit facility consisting of a revolving credit facility, letter of credit sub-facility and swing line facility of up to an aggregate principal amount of $400.0 million. The 2011 Credit Facility was terminated without any prepayment penalties. The remaining unamortized deferred financing costs of $0.8 million were written off at the time of the termination.

The interest rate per annum applicable to the 2011 Credit Facility was, 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 had ranged from 225 to 300 basis points, and the applicable margin for all other loans had ranged 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 was equal to 0.5%. The weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 3.14% and 2.88% for the three-month periods ended June 30, 2015 and June 30, 2014, respectively, and the weighted average interest rates on the outstanding borrowings under the 2011 Credit Facility were 3.15% and 2.88% for six months endedJune 30, 2015 and June 30, 2014, respectively.

Letter of Credit Facility

On November 7, 2013, we entered into an uncommitted, unsecured $15.0 million letter of credit facility to be used solely for the issuances of performance letters of credit. As of June 30, 2015, $2.0 million of letters of credit were outstanding under the facility.

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OTHER INCOME, NET

6 Months Ended

Jun. 30, 2015

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,
	2015			2014			2015			2014
	(in thousands)
Interest income	$	(25	)	$	(30	)	$	(40	)	$	(48	)
Foreign exchange (gain) loss	333			(1,377		)	1,593			(11		)
Allowance for collectibility of notes receivable	—			—			3,950			—
Other, net	(556		)	(1,326		)	(1,319		)	(2,743		)
Total	$	(248	)	$	(2,733	)	$	4,184		$	(2,802	)

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2015

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, if any. We establish a provision for a contingent liability when it is probable that a liability has been incurred and the amount is reasonably estimable. We have $0.2 million of other liabilities related to litigation that is deemed probable and reasonably estimable as of June 30, 2015. 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.

Between May of 2013 and June of 2014, five lawsuits (four class actions and one enforcement action) were filed in California involving alleged violations of California's wage and hour laws. In general, the lawsuits allege failure to pay wages, including overtime and minimum wages, failure to pay final wages upon employment terminations in a timely manner, failure to reimburse reasonable and necessary business expenses, failure to provide wage statements consistent with California law, and violations of the California meal and break period laws, among other claims. Two of the five cases have been consolidated in United States District Court for the Central District of California. A hearing on the class certification motion is scheduled for August 10, 2015. One of the remaining cases has been stayed pending outcome of the class certification motion. The fourth case is waiting for a decision regarding whether it will move forward in California state court or in federal court. The fifth case is an enforcement action for civil penalties based on California’s Private Attorneys General Act, which is pending in California state court. We have investigated the claims in all five lawsuits, and intend to vigorously defend them. At this time, we cannot estimate any possible loss or range of loss.

In January, 2014, the SEC advised Key that it is investigating possible violations of the U.S. Foreign Corrupt Practices Act (“FCPA”) involving business activities of Key’s operations in Russia. In April 2014, we became aware of an allegation involving our Mexico operations that, if true, could potentially constitute a violation of certain of our policies, including our Code of Business Conduct, the FCPA and other applicable laws. On May 30, 2014, Key voluntarily disclosed the allegation involving our Mexico operations and certain information from the Company’s initial investigation to both the SEC and Department of Justice (“DOJ”). A Special Committee of our Board of Directors is investigating this allegation as well as possible violations of the FCPA involving business activities of our operations in Russia. The fact-finding portion of the Special Committee’s investigation, which also included a review of certain aspects of the Company’s operations in Colombia, as well as a risk assessment with regard to our other international locations, has been completed and the Special Committee is in the process of concluding its work. We continue to cooperate with the investigations by the SEC and DOJ. At this time we are unable to predict the ultimate resolution of these matters with these agencies and, accordingly, cannot reasonably estimate any possible loss or range of loss.

In August 2014, two class action lawsuits were filed in the U.S. District Court, Southern District of Texas, Houston Division, individually and on behalf of all other persons similarly situated against the Company and certain officers of the Company, alleging violations of federal securities laws, specifically, violations of Section 10(b) and Rule 10(b)-5, Section 20(a) of the Securities Exchange Act of 1934. Those lawsuits were styled as follows: Sean Cady, Individually and on Behalf of All Other Persons Similarly Situated v. Key Energy Services, Inc., Richard J. Alario, and J. Marshall Dodson, No. 4:14-cv-2368, filed on August 15, 2014; and Ian W. Davidson, Individually and on Behalf of All Other Persons Similarly Situated v. Key Energy Services, Inc., Richard J. Alario, and J. Marshall Dodson, No. 4.14-cv-2403, filed on August 21, 2014. On December 11, 2014, the Court entered an order that consolidated the two lawsuits into one action, along with any future filed tag-along actions brought on behalf of purchasers of Key Energy Services, Inc. common stock. The order also appointed Inter-Local Pension Fund as the lead plaintiff in the class action and approved the law firm of Spector Roseman Kodroff & Willis, P.C. as lead counsel for the consolidated class and Kendall Law Group, LLP, as local counsel for the consolidated class. The lead plaintiff filed the consolidated amended complaint on February 13, 2015. Among other changes, the consolidated amended complaint adds Taylor M. Whichard III and Newton W. Wilson III as defendants and expands the class period to include the timeframe between September 4, 2012 and July 17, 2014. Defendants Key Energy Services, Inc., Richard J. Alario, J. Marshall Dodson and Newton W. Wilson III filed a Motion to Dismiss on April 14, 2015. Defendant Taylor M. Whichard III filed a Joinder in Motion and Motion to Dismiss on the same date. Because this case is in the early stages, we cannot predict the outcome at this time. Accordingly, we cannot estimate any possible loss or range of loss.

In addition, in a letter dated September 4, 2014, a purported shareholder of the Company demanded that the Board commence an independent internal investigation into and legal proceedings against each member of the Board, a former member of the Board and certain officers of the Company for alleged violations of Maryland and/or federal law. The letter alleges that the Board and senior officers breached their fiduciary duties to the Company, including the duty of loyalty and due care, by (i) improperly accounting for goodwill, (ii) causing the Company to potentially violate the FCPA, resulting in an investigation by the SEC, (iii) causing the Company to engage in improper conduct related to the Company’s Russia operations; and (iv) making false statements regarding, and failing to properly account for, certain contracts with Pemex. As described in the letter, the purported shareholder believes that the legal proceedings should seek recovery of damages in an unspecified amount allegedly sustained by the Company. The Board of Directors referred the demand letter to the Special Committee. We cannot predict the outcome of this matter.

In March 2015, two collective action lawsuits were filed in the Southern District of Texas, Corpus Christi Division, individually and on behalf of all others similarly situated, alleging violations of the Fair Labor Standards Act of 1938 (“FLSA”). We have answered the lawsuits and asserted affirmative defenses. Because the cases are in the early stages, we cannot predict the outcomes at this time. Accordingly, we cannot estimate any possible loss or range of loss for either case.

In April 2015, a collective action lawsuit was filed in the Middle District of Pennsylvania, individually and on behalf of similarly situated employees, alleging violations of the Pennsylvania Minimum Wage Act and the FLSA. This lawsuit was dismissed, without prejudice, on April 30, 2015.

            In May 2015, a class and collective action lawsuit was filed in the Southern District of Texas, Houston Division, individually and on behalf of all others similarly situated, alleging violations of the FLSA and the New Mexico Minimum Wage Act. We have answered the lawsuit and asserted affirmative defenses. Because the case is in the early stages, we cannot predict the outcome at this time. Accordingly, we cannot estimate any possible loss or range of loss of this case.

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, 2015 and December 31, 2014, we have recorded $59.0 million and $61.0 million, respectively, of self-insurance reserves related to workers’ compensation, vehicular liabilities and general liability claims. Partially offsetting these liabilities, we had $18.7 million of insurance receivables as of June 30, 2015 and December 31, 2014. 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. As of June 30, 2015 and December 31, 2014, we have recorded $5.5 million and $5.7 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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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Condensed Consolidating Unaudited Statements Of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities			$ (1,198)	$ 107,268
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	$ (13,680)	$ (40,904)	(32,675)	(69,429)
Intercompany notes and accounts			0	0
Other investing activities, net			10,545	9,389
Net cash used in investing activities			(22,130)	(60,040)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt			0	(3,573)
Proceeds from borrowings on revolving credit facility			130,000	115,000
Repayments on revolving credit facility			(200,000)	(160,000)
Payment of deferred financing costs			(11,072)	0
Repurchases of common stock			(312)	(2,211)
Intercompany notes and accounts			0	0
Other financing activities, net			(2,950)	(1,221)
Net cash provided by (used in) financing activities			221,216	(52,005)
Proceeds from long-term debt			305,550	0
Effect of changes in exchange rates on cash			289	(81)
Net increase (decrease) in cash and cash equivalents			198,177	(4,858)
Cash and cash equivalents, beginning of period			27,304	28,306
Cash and cash equivalents, end of period	225,481	23,448	225,481	23,448
Parent Company
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities			0	0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			0	0
Intercompany notes and accounts			0	0
Other investing activities, net			0	0
Net cash used in investing activities			0	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt				(3,573)
Proceeds from borrowings on revolving credit facility			130,000	115,000
Repayments on revolving credit facility			(200,000)	(160,000)
Payment of deferred financing costs			(11,072)
Repurchases of common stock			(312)	(2,211)
Intercompany notes and accounts			(41,993)	41,350
Other financing activities, net			(2,950)	(1,221)
Net cash provided by (used in) financing activities			179,223	(10,655)
Proceeds from long-term debt			305,550
Effect of changes in exchange rates on cash			0	0
Net increase (decrease) in cash and cash equivalents			179,223	(10,655)
Cash and cash equivalents, beginning of period			19,949	23,115
Cash and cash equivalents, end of period	199,172	12,460	199,172	12,460
Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities			(6,317)	100,170
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(31,435)	(66,280)
Intercompany notes and accounts			41,993	(41,350)
Other investing activities, net			10,545	9,389
Net cash used in investing activities			21,103	(98,241)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt				0
Proceeds from borrowings on revolving credit facility			0	0
Repayments on revolving credit facility			0	0
Payment of deferred financing costs			0
Repurchases of common stock			0	0
Intercompany notes and accounts			0	0
Other financing activities, net			0	0
Net cash provided by (used in) financing activities			0	0
Proceeds from long-term debt			0
Effect of changes in exchange rates on cash			0	0
Net increase (decrease) in cash and cash equivalents			14,786	1,929
Cash and cash equivalents, beginning of period			450	788
Cash and cash equivalents, end of period	15,236	2,717	15,236	2,717
Non-Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities			5,119	7,098
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(1,240)	(3,149)
Intercompany notes and accounts			0	0
Other investing activities, net			0	0
Net cash used in investing activities			(1,240)	(3,149)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt				0
Proceeds from borrowings on revolving credit facility			0	0
Repayments on revolving credit facility			0	0
Payment of deferred financing costs			0
Repurchases of common stock			0	0
Intercompany notes and accounts			0	0
Other financing activities, net			0	0
Net cash provided by (used in) financing activities			0	0
Proceeds from long-term debt			0
Effect of changes in exchange rates on cash			289	(81)
Net increase (decrease) in cash and cash equivalents			4,168	3,868
Cash and cash equivalents, beginning of period			6,905	4,403
Cash and cash equivalents, end of period	11,073	8,271	11,073	8,271
Eliminations
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities			0	0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			0	0
Intercompany notes and accounts			(41,993)	41,350
Other investing activities, net			0	0
Net cash used in investing activities			(41,993)	41,350
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt				0
Proceeds from borrowings on revolving credit facility			0	0
Repayments on revolving credit facility			0	0
Payment of deferred financing costs			0
Repurchases of common stock			0	0
Intercompany notes and accounts			41,993	(41,350)
Other financing activities, net			0	0
Net cash provided by (used in) financing activities			41,993	(41,350)
Proceeds from long-term debt			0
Effect of changes in exchange rates on cash			0	0
Net increase (decrease) in cash and cash equivalents			0	0
Cash and cash equivalents, beginning of period			0	0
Cash and cash equivalents, end of period	$ 0	$ 0	$ 0	$ 0

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ASSETS HELD FOR SALE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
ASSETS HELD FOR SALE [Abstract]
Impairment expense	$ 21,352	$ 28,687	$ 43,052	$ 28,687
Property and equipment held for sale	3,631		3,631		$ 0
Inventories held for sale	$ 591		$ 591		$ 0

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COMMITMENTS AND CONTINGENCIES - Additional Information (Details) $ in Millions	1 Months Ended				14 Months Ended
	May. 31, 2015 lawsuit	Apr. 30, 2015 lawsuit	Mar. 31, 2015 lawsuit	Aug. 31, 2014 lawsuit	Jun. 30, 2014 lawsuit	Jun. 30, 2015 USD ($) lawsuit	Dec. 31, 2014 USD ($)
Loss Contingencies [Line Items]
Aggregate amount of contingent litigation liabilities | $						$ 0.2
Number of lawsuits filed					5
Loss Contingency, Pending Claims, Number						1
Self-insurance liabilities related to workers' compensation, vehicular liabilities, and general liability claims recorded | $						$ 59.0	$ 61.0
Insurance receivables which partially offset self-insurance liabilities | $						18.7	18.7
Environmental remediation liabilities recorded | $						$ 5.5	$ 5.7
Collective Action [Member]
Loss Contingencies [Line Items]
Number of lawsuits filed	1	1	2
Class Action [Member]
Loss Contingencies [Line Items]
Number of lawsuits filed				2	4
Enforcement Action [Member]
Loss Contingencies [Line Items]
Number of lawsuits filed					1
Lawsuits consolidated to one action [Member] | Class Action [Member]
Loss Contingencies [Line Items]
Number of lawsuits filed				2	2
Pending decision regarding whether lawsuit will move forward in state or federal court [Member] | Class Action [Member]
Loss Contingencies [Line Items]
Number of lawsuits filed					1

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We revised our reportable business segments as of the fourth quarter of 2014. The revised reportable segments are U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services and International. We also have a “Functional Support” segment associated with overhead and other costs in support of our reportable segments. Segment disclosures as of and for the the three and six months ended June 30, 2014 have been revised to reflect the change in reportable segments. We revised our segments to reflect changes in management’s resource allocation and performance assessment in making decisions regarding our business. Our U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services operate geographically within the United States. The International reportable segment includes our operations in Mexico, Colombia, Ecuador, Russia, Bahrain and Oman. Our Canadian subsidiary is also reflected in our International reportable segment. We evaluate the performance of our segments based on gross margin measures. All inter-segment sales pricing is based on current market conditions.

U.S. Rig Services

Our U.S. Rig 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 fishing 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 closely related to capital spending by oil and natural gas producers, which is generally a function of oil and natural gas prices.

International

Our International segment includes operations in Mexico, Colombia, Ecuador, the Middle East and Russia. 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, we have a technology development and control systems business based in Canada.

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

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.

In April 2015, we announced our decision to exit markets in which we participate outside of North America. Our strategy is to sell or relocate the assets of the businesses operating in these markets.

Functional Support

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

Financial Summary

The following tables set forth our unaudited segment information as of and for the three and six months ended June 30, 2015 and 2014 (in thousands):

As of and for the three months ended June 30, 2015
	U.S. Rig Services			Fluid Management Services			Coiled Tubing Services			Fishing and Rental Services			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	93,253		$	39,178		$	21,609		$	28,142		$	15,314		$	—		$	—		$	197,496
Intersegment revenues	196			421			—			1,447			798			542			(3,404		)	—
Depreciation and amortization	14,975			6,525			5,841			8,982			6,507			3,066			—			45,896
Impairment expense	—			—			—			—			21,352			—			—			21,352
Other operating expenses	82,410			32,712			19,851			25,734			16,326			32,518			—			209,551
Operating loss	(4,132		)	(59		)	(4,083		)	(6,574		)	(28,871		)	(35,584		)	—			(79,303		)
Interest expense, net of amounts capitalized	—			—			—			—			—			17,058			—			17,058
Loss before income taxes	(4,067		)	(41		)	(4,074		)	(6,574		)	(28,919		)	(52,438		)	—			(96,113		)
Long-lived assets(1)	796,551			171,058			166,931			319,480			221,832			245,188			(152,640		)	1,768,400
Total assets	1,609,569			299,670			251,201			658,464			371,152			(481,597		)	(418,681		)	2,289,778
Capital expenditures, excluding acquisitions	3,201			2,506			2,007			2,124			1,509			2,333			—			13,680

As of and for the three months ended June 30, 2014
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	169,980	$	62,087	$	43,108		$	49,340	$	26,080		$	—		$	—		$	350,595
Intersegment revenues	167		32		—			—		2,547			543			(3,289		)	—
Depreciation and amortization	14,630		8,255		5,968			12,088		7,795			3,448			—			52,184
Impairment expense	—		—		—			—		28,687			—			—			28,687
Other operating expenses	132,389		52,874		37,722			36,449		26,444			34,886			—			320,764
Operating income (loss)	22,961		958		(582		)	803		(36,846		)	(38,334		)	—			(51,040		)
Interest expense, net of amounts capitalized	—		—		(1		)	—		26			13,401			—			13,426
Income (loss) before income taxes	23,520		1,183		(392		)	981		(35,289		)	(51,736		)	—			(61,733		)
Long-lived assets(1)	774,613		208,563		232,228			412,033		269,153			256,298			(160,271		)	1,992,617
Total assets	1,565,553		285,746		255,615			649,739		436,067			(358,680		)	(388,932		)	2,445,108
Capital expenditures, excluding acquisitions	25,759		896		2,000			7,691		1,796			2,762			—			40,904

As of and for the six months ended June 30, 2015
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services			International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	214,075	$	89,933	$	52,626		$	70,832		$	37,829		$	—		$	—		$	465,295
Intersegment revenues	459		729		—			3,249			2,165			1,084			(7,686		)	—
Depreciation and amortization	29,685		14,247		11,608			17,946			13,336			6,285			—			93,107
Impairment expense	—		—		21,700			—			21,352			—			—			43,052
Other operating expenses	180,522		74,269		47,223			59,516			41,623			78,572			—			481,725
Operating income (loss)	3,868		1,417		(27,905		)	(6,630		)	(38,482		)	(84,857		)	—			(152,589		)
Interest expense, net of amounts capitalized	—		—		—			—			—			30,400			—			30,400
Income (loss) before income taxes	3,965		1,483		(27,894		)	(6,800		)	(39,550		)	(118,377		)	—			(187,173		)
Long-lived assets(1)	796,551		171,058		166,931			319,480			221,832			245,188			(152,640		)	1,768,400
Total assets	1,609,569		299,670		251,201			658,464			371,152			(481,597		)	(418,681		)	2,289,778
Capital expenditures, excluding acquisitions	12,862		3,800		4,121			5,619			2,875			3,398			—			32,675

As of and for the six months ended June 30, 2014
	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International			Functional Support(2)			Reconciling Eliminations			Total
Revenues from external customers	$	334,731	$	123,675	$	87,603		$	102,550	$	58,177		$	—		$	—		$	706,736
Intersegment revenues	290		144		—			—		4,768			1,085			(6,287		)	—
Depreciation and amortization	28,791		16,433		11,805			24,615		15,699			5,936			—			103,279
Impairment expense	—		—		—			—		28,687			—			—			28,687
Other operating expenses	258,637		103,937		70,242			74,302		61,128			63,686			—			631,932
Operating income (loss)	47,303		3,305		5,556			3,633		(47,337		)	(69,622		)	—			(57,162		)
Interest expense, net of amounts capitalized	—		—		(1		)	—		28			26,953			—			26,980
Income (loss) before income taxes	48,244		3,698		5,843			3,929		(47,237		)	(95,817		)	—			(81,340		)
Long-lived assets(1)	774,613		208,563		232,228			412,033		269,153			256,298			(160,271		)	1,992,617
Total assets	1,565,553		285,746		255,615			649,739		436,067			(358,680		)	(388,932		)	2,445,108
Capital expenditures, excluding acquisitions	43,896		1,758		3,497			11,155		3,670			5,453			—			69,429

(1) Long-lived assets include fixed assets, goodwill, intangibles and other non-current assets.

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

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the six months endedJune 30, 2015 are as follows:

	U.S. Rig Services		Fluid Management Services		Coiled Tubing Services			Fishing and Rental Services		International		Total
	(in thousands)
December 31, 2014	$	297,719	$	24,479	$	82,695		$	173,463	$	4,383	$	582,739
Goodwill impairment	—		—		(21,700		)	—		—		(21,700		)
June 30, 2015	$	297,719	$	24,479	$	60,995		$	173,463	$	4,383	$	561,039

Other Intangible Assets

The components of our other intangible assets as of June 30, 2015 and December 31, 2014 are as follows:

	June 30, 2015			December 31, 2014
	(in thousands)
Noncompete agreements:
Gross carrying value	$	2,269		$	2,269
Accumulated amortization	(1,860		)	(1,710		)
Net carrying value	409			559
Patents, trademarks and tradenames:
Gross carrying value	3,129			3,106
Accumulated amortization	(283		)	(263		)
Net carrying value	2,846			2,843
Customer relationships and contracts:
Gross carrying value	59,079			59,045
Accumulated amortization	(53,571		)	(52,303		)
Net carrying value	5,508			6,742
Developed technology:
Gross carrying value	8,494			8,494
Accumulated amortization	(4,340		)	(4,138		)
Net carrying value	4,154			4,356
Customer backlog:
Gross carrying value	779			779
Accumulated amortization	(779		)	(779		)
Net carrying value	—			—
Total:
Gross carrying value	73,750			73,693
Accumulated amortization	(60,833		)	(59,193		)
Net carrying value	$	12,917		$	14,500

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 2015		2016		2017		2018		2019		2020
		(in thousands)
Noncompete agreements	1.3	$	149	$	260	$	—	$	—	$	—	$	—
Trademarks	2.9	20		40		40		17		—		—
Customer relationships and contracts	3.6	1,237		1,876		1,392		431		341		231
Developed technology	15.5	199		398		398		398		324		221
Total expected intangible asset amortization expense		$	1,605	$	2,574	$	1,830	$	846	$	665	$	452

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OTHER INCOME, NET (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Other Income and Expenses [Abstract]
Interest income	$ (25)	$ (30)	$ (40)	$ (48)
Foreign exchange (gain) loss	333	(1,377)	1,593	(11)
Allowance for collectibility of notes receivable	0	0	3,950	0
Other, net	(556)	(1,326)	(1,319)	(2,743)
Total	$ 248	$ 2,733	$ (4,184)	$ 2,802

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GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Intangible Assets [Line Items]
Gross carrying value	$ 73,750	$ 73,693
Accumulated amortization	(60,833)	(59,193)
Net carrying value	12,917	14,500
Noncompete agreements
Intangible Assets [Line Items]
Gross carrying value	2,269	2,269
Accumulated amortization	(1,860)	(1,710)
Net carrying value	409	559
Patents, trademarks and tradename
Intangible Assets [Line Items]
Gross carrying value	3,129	3,106
Accumulated amortization	(283)	(263)
Net carrying value	2,846	2,843
Customer relationships and contracts
Intangible Assets [Line Items]
Gross carrying value	59,079	59,045
Accumulated amortization	(53,571)	(52,303)
Net carrying value	5,508	6,742
Developed technology
Intangible Assets [Line Items]
Gross carrying value	8,494	8,494
Accumulated amortization	(4,340)	(4,138)
Net carrying value	4,154	4,356
Customer backlog
Intangible Assets [Line Items]
Gross carrying value	779	779
Accumulated amortization	(779)	(779)
Net carrying value	$ 0	$ 0

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
NET LOSS	$ (65,379)	$ (52,196)	$ (125,055)	$ (64,095)
Other comprehensive income (loss):
Foreign currency translation income (loss)	1,213	3,264	516	(2,001)
COMPREHENSIVE LOSS	$ (64,166)	$ (48,932)	$ (124,539)	$ (66,096)

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EQUITY

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

EQUITY

EQUITY

A reconciliation of the total carrying amount of our equity accounts for the six months ended June 30, 2015 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings (Deficit)			Total
	Number of Shares		Amount at Par
	(in thousands)
Balance at December 31, 2014	153,557		$	15,356		$	960,647		$	(37,280	)	$	119,340		$	1,058,063
Foreign currency translation	—		—			—			516			—			516
Common stock purchases	(145	)	(15		)	(297		)	—			—			(312		)
Share-based compensation	4,242		424			6,212			—			—			6,636
Tax expense from share-based compensation	—		—			(2,950		)	—			—			(2,950		)
Net loss	—		—			—			—			(125,055		)	(125,055		)
Balance at June 30, 2015	157,654		$	15,765		$	963,612		$	(36,764	)	$	(5,715	)	$	936,898

A reconciliation of the total carrying amount of our equity accounts for six months ended June 30, 2014 is as follows:

	COMMON STOCKHOLDERS
	Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
	Number of Shares		Amount at Par
	(in thousands)
Balance at December 31, 2013	152,331		$	15,233		$	953,306		$	(15,414	)	$	297,968		$	1,251,093
Foreign currency translation	—		—			—			(2,001		)	—			(2,001		)
Common stock purchases	(283	)	(28		)	(2,183		)	—			—			(2,211		)
Share-based compensation	1,537		154			6,947			—			—			7,101
Tax expense from share-based compensation	—		—			(1,221		)	—			—			(1,221		)
Net loss	—		—			—			—			(64,095		)	(64,095		)
Balance at June 30, 2014	153,585		$	15,359		$	956,849		$	(17,415	)	$	233,873		$	1,188,666

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Allowance for collectibility of notes receivable	$ 0	$ 0	$ 3,950	$ 0
6.75% Senior Notes due 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt stated percentage	6.75%		6.75%
Senior notes, carrying value	$ 675,000		$ 675,000		$ 675,000
Senior notes, fair value	$ 399,938		$ 399,938		$ 413,438
Percentage of Senior Notes fair value over carrying value	59.30%		59.30%

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LONG-TERM DEBT (Tables)

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Long-Term Debt

As of June 30, 2015 and December 31, 2014, the components of our long-term debt were as follows:

	June 30, 2015			December 31, 2014
	(in thousands)
6.75% Senior Notes due 2021	$	675,000		$	675,000
Term Loan Facility due 2020	315,000			—
Senior Secured Credit Facility revolving loans due 2016	—			70,000
Debt issuance costs and unamortized premium (discount) on debt, net	(25,770		)	(7,309		)
Total	964,230			737,691
Less current portion	(3,150		)	—
Long-term debt	$	961,080		$	737,691

Schedule of Debt

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 BALANCE SHEET INFORMATION - Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Other current liabilities:
Accrued payroll, taxes and employee benefits	$ 19,394	$ 32,477
Accrued operating expenditures	18,858	45,899
Income, sales, use and other taxes	17,546	25,892
Self-insurance reserve	30,448	31,359
Accrued interest	17,869	15,241
Insurance premium financing	1,189	7,515
Share-based compensation and other liabilities	4,919	5,844
Total	$ 110,223	$ 164,227

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ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2015

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, 2015 and December 31, 2014.

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, 2015				December 31, 2014
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Financial assets:
Notes receivable - Argentina operations sale	$	3,755	$	3,755	$	8,300	$	8,300
Financial liabilities:
6.75% Senior Notes due 2021	$	675,000	$	399,938	$	675,000	$	413,438
Term Loan Facility due 2020	315,000		315,000		—		—
Credit Facility revolving loans	—		—		70,000		70,000

Notes receivable — Argentina operations sale. The fair value of these notes receivable are based upon the quoted market Treasury rates as of the 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. The carrying value and fair value are net of a $4.0 million valuation allowance for collectibility of the notes receivable.

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, 2015 was $675.0 million, and the fair value was $399.9 million (59.3% of carrying value).

Term Loan Facility due 2020. Because the variable interest rates of these loans approximate current market rates, the fair values of the loans borrowed under this facility approximate their carrying values.

Credit Facility Revolving Loans. In connection with entering into the ABL Facility and the Term Loan Facility, we terminated our 2011 Credit Facility on June 1, 2015.