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Exhibit 99.1

Key Energy Services, Inc.

News Release

For Immediate Release:
Tuesday, July 29, 2003 Contact: John Daniel
(215) 862-7900

KEY ENERGY ANNOUNCES SECOND QUARTER EARNINGS AND STRONG CASH FLOW

MIDLAND, TX, July 29, 2003 — Key Energy Services, Inc. (NYSE: KEG) today announced its operating results for the quarter ended June 30, 2003.

Earnings per diluted share for the June 2003 quarter were approximately $0.05 versus a loss per share of approximately $0.05 for the June 2002 quarter. Revenue for the June 2003 quarter totaled approximately $239.6 million versus approximately $169.7 million for the June 2002 quarter. On a sequential basis, revenue for the June 2003 quarter increased approximately $24.5 million, or 11.4%, over the revenue for the March 2003 quarter while earnings per diluted share for the June 2003 quarter improved $0.06 over a loss per share of $0.01 for the March 2003 quarter.

During the June 2003 quarter, industry conditions continued to improve modestly. Rig hours for the June 2003 quarter totaled approximately 601,800, representing a 5.3% increase over total rig hours of approximately 571,400 for the March 2003 quarter and an 11.6% increase over total rig hours of approximately 539,300 for the June 2002 quarter. During July 2003, activity levels have continued to improve, with total weekly rig hours currently approaching 48,000, excluding the July 4^th holiday week, compared to an average of 47,200 for the June 2003 quarter. Additionally, pricing increases that were announced in April have been implemented in most of the Company's operating regions.

The improved operating results and strong cash flow for the June 2003 quarter are a direct result of increased demand for production services, an increase in the contribution from the Q Services acquisition, particularly the pressure pumping business, and the successful consolidation of Q Services' trucking and rental tool operations. During the June 2003 quarter, pressure pumping business activity increased significantly over the March 2003 quarter. With the recent completion of the Company's $150 million 6³/8% Senior Notes offering and the Company's ability to generate strong free cash flow, as evidenced by the June quarter's results, the Company will be in the position to retire its $97.5 million 14% Senior Subordinated Notes later this year or in January 2004. The retirement of the 14% Notes will result in a decrease in annual cash interest payments of over $10 million.

Francis D. John, Chairman and CEO, stated "We are pleased with the strength in activity levels, both in our U.S. and international operations. Our recent pricing initiatives, which were implemented during the June 2003 quarter, are now in place. Based on current activity and anticipated increases in demand for our services, we expect to see continued improvement in our operating results over the next several quarters."

Mr. John further commented, "We continue to believe that industry demand for drilling and production services, particularly in the natural gas producing regions, will improve over the next several quarters. With accelerating decline curves in most U.S. natural gas wells and anticipated increases in industrial demand, we believe that natural gas prices should remain at levels attractive for both increased exploration and development by our customers."

Mr. John concluded, "A prolonged, modest upcycle, which we believe we are currently in, should yield tremendous benefits to our stakeholders. Our ability to generate strong free cash flow will allow us to continue our efforts in upgrading equipment, investing in safety and training and introducing technology. We will continue to reduce debt and strengthen the balance sheet. As previously stated, it is our corporate objective to be in a position to pay a dividend or repurchase shares within the next two to three years."

6 Desta Drive, Midland, TX 79705

Key Energy Services, Inc. is the world's largest rig-based, onshore well service company and owns approximately 1,492 well service rigs, 2,295 oilfield service vehicles, as well as 76 drilling rigs. The Company provides diversified energy operations including well servicing, contract drilling and other oilfield services. The Company has operations in all major onshore oil and gas producing regions of the continental United States and internationally in Argentina, Egypt and Canada.

Certain comments contained in this news release concerning the business outlook and anticipated financial results of the Company constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to the safe harbor created by that act. Whenever possible, the Company has identified these "forward-looking statements" by words such as "expects","believes", "anticipates" and similar phrases. The forward-looking statements are based upon management's expectations and beliefs and, although these statements are based upon reasonable assumptions, there can be no assurances that the financial results or components will be as estimated. The Company assumes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.

			Three Months Ended June 30,						Six Months Ended June 30,
(Thousands, except per share data)
			2003			2002			2003			2002
REVENUES:
	Well servicing		$	219,970		$	154,051		$	419,128		$	308,485
	Contract drilling			18,511			13,130			33,106			27,092
	Other			1,114			2,568			2,485			4,413
TOTAL REVENUES				239,595			169,749			454,719			339,990
COSTS AND EXPENSES:
	Well servicing			154,333			121,003			301,238			234,361
	Contract drilling			13,189			10,387			24,337			21,453
	Depreciation, depletion and amortization			25,690			20,783			51,291			40,672
	General and administrative			23,585			16,881			45,703			30,575
	Interest			12,166			10,411			23,214			20,286
	Other expenses			974			1,245			1,889			2,196
	Foreign currency translation gain, Argentina			—			(401	)		—			(401	)
	(Gain) loss on retirement of debt			(14	)		(11	)		(16	)		8,457
TOTAL COSTS AND EXPENSES				229,923			180,298			447,656			357,599
Income (loss) before income taxes				9,672			(10,549	)		7,063			(17,609	)
Income tax (expense) benefit				(3,519	)		4,686			(2,684	)		7,120
NET INCOME (LOSS)			$	6,153		$	(5,863	)	$	4,379		$	(10,489	)
EARNINGS (LOSS) PER SHARE:
	Net income (loss)
		Basic	$	0.05		$	(0.05	)	$	0.03		$	(0.10	)
		Diluted	$	0.05		$	(0.05	)	$	0.03		$	(0.10	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
		Basic		129,128			109,776			128,765			109,225
		Diluted		131,356			109,776			130,761			109,225

ADDITIONAL SELECTED FINANCIAL AND OPERATING DATA (UNAUDITED)

			As of and for the Three Months Ended
			June 30, 2003			March 31, 2003
Rig Hours:
	Daylight rigs			468,858			457,905
	24-hour rigs			80,646			71,507
	Drilling rigs			52,272			41,989
Trucking Hours:				719,005			691,108
Selected Balance Sheet Data (dollars in thousands):
	Cash and cash equivalents		$	72,664		$	3,562
	Total assets		$	1,587,459		$	1,492,614
	Net funded debt:
		Total debt (including capital leases)	$	558,700		$	499,069
		Less: Cash and cash equivalents		72,664			3,562
	Net funded debt		$	486,036		$	495,507
	Total capitalization:
		Net funded debt	$	486,036		$	495,507
		Stockholders' equity		718,490			699,208
	Total capitalization		$	1,204,526		$	1,194,715
	Net funded debt/total capitalization (1)			40.4	%		41.5	%
	Capital expenditures		$	23,636		$	19,218

(1)

Management considers net funded debt/total capitalization to be a measure of liquidity and believes that it is a more useful measure than total debt/total capitalization since the cash on hand can be used to retire outstanding debt.

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KEY ENERGY ANNOUNCES SECOND QUARTER EARNINGS AND STRONG CASH FLOW