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| Dawson Production Services to Pursue Strategic Alternatives to Maximize Shareholder Value |
Calls Statements in Key Energy Group's Press Release Misleading
SAN ANTONIO, Aug. 5 /PRNewswire/ -- Dawson Production Services, Inc.
(NYSE: DPS) said today that certain statements in Key Energy Group's August
5th press release are misleading and distort Dawson's position on Key's
$16 per share proposal of June 29, 1998. Subsequent to a series of meetings
and deliberations, Dawson's Board of Directors on Saturday August 1, 1998
authorized company management and its financial advisers, Morgan Stanley Dean
Witter, to pursue strategic alternatives to maximize shareholder value
including, but not limited to, the negotiation of a potential sale to Key.
Subsequently, Morgan Stanley Dean Witter contacted Key's financial advisers,
Bear, Stearns & Co., to advise them that Key's $16 per share proposal was not
compelling but that Dawson would entertain discussions at a higher price.
Michael E. Little, Chairman, President and CEO of Dawson, said, "Our
Board's mandate is to protect and maximize shareholder value, particularly at
a time when oil prices are at a 12-year low. That is exactly what the Board
has done in authorizing management and Morgan Stanley Dean Witter to pursue
strategic alternatives."
Commenting on Key's August 5th press release, Little said, "We began on
Monday, August 3rd what we believed was an attempt to start good faith
discussions with Key. Given that we had not yet heard back from Key, we were
not in a position to comment during yesterday's earnings conference call."
Little added, "Key's comments today regarding our earnings performance are
surprising because they are well aware of the difficult oil pricing
environment. Key operates in the same business that we do and, in fact, a
number of analysts have recently reduced earnings estimates for Key's 1998
fiscal fourth quarter."
He continued, "Our Board remains committed to serving the best interests
of Dawson shareholders and, in the meantime, has directed management to
continue its normal course of business, including pursuing accretive
transactions." He said that the letter of intent to acquire HSI Group was the
result of discussions that began in February of this year.
Noting that Dawson shares had traded at more than $30 as recently as last
October, Paul E. McCollam, general partner of Rimco Associates, which holds
approximately 11 percent of Dawson's outstanding shares, and who is a member
of Dawson's Board, said, "As Dawson's largest shareholder, we support the
Board's decision to pursue strategic alternatives to maximize shareholder
value."
Little concluded, "We note that Key has initiated litigation to overturn
our shareholder rights plan. The plan was adopted last year by our Board of
Directors precisely to enable the Board to be in a position to pursue all
available alternatives to maximize value for shareholders."
Dawson Production Services, Inc. is a San Antonio, Texas-based diversified
energy services company providing workover rig services, liquid services, and
production services to oil and gas operators. The Company operates from 37
locations concentrated primarily in the Texas and Louisiana Gulf Coasts, the
Permian Basin areas of West Texas and New Mexico, and California.
Certain statements made in this press release are forward-looking and are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Among other things, the utilization of assets
can be impaired by adverse weather conditions and customer demand; cost
savings efforts can be negated by increases in labor rates and production
costs; margins are subject to unpredictable fluctuations in commodity oil
prices; and continued growth is dependent upon purchasing decisions by present
and potential customers as well as increased competition from new and existing
competitors. In addition to the factors set forth in this release, the
environmental, governmental, technological, economic, competitive, and other
factors identified in the Company's filings with the Securities and Exchange
Commission could affect the forward-looking statements contained in this press
release.
SOURCE Dawson Production Services
back to topCompany News On-Call:
fax, 800-758-5804, ext. 117929
CONTACT:
P. Mark Stark, CFO of Dawson Production
Services, Inc., 210-476-0420; or Ken Dennard of Easterly I.R.,
713-529-6600, or kdennard@easterly.com, for Dawson Production
Services
