RISK FACTORS

Substantial Leverage and History of Losses.  Key, as the
surviving company, will be highly leveraged due to the
substantial indebtedness Key and WellTech have incurred over
time primarily to finance acquisitions and capital expenditures,
expand operations and, in the case of WellTech, finance
operating losses.  As of September 30, 1995, Key's aggregate
debt was approximately $16 million.  After giving effect to the
Merger and the New Indebtedness, as of September 30, 1995, Key's
aggregate debt on a pro forma basis would have been
approximately $36 million.  Key may incur additional
indebtedness to make investments, acquisitions and capital
expenditures in the future.  (See "Management's Discussion and
Analysis of Results of Operations and Financial Condition of
Key--Liquidity and Capital Resources".)  Key anticipates that it
will continue to have substantial indebtedness for the
foreseeable future.

WellTech has had operating losses in each of the five years
ended December 31, 1994 but had operating income for the nine
months ended September 30, 1995.  WellTech has also been in
violation of certain restrictive covenants in its loan agreement
with its principal lender which has necessitated obtaining
waivers from that lender.  There can be no assurance that
WellTech will not have operating losses for the year ended
December 31, 1995 or, if the Merger is consummated, that the
operations of Key subsequent to the Merger will not be adversely
affected by the same factors that contributed to WellTech's
operating losses.  (See "Management's  Discussion and Analysis
of Financial Condition and Results of Operations of WellTech".)

In recent years, cash generated from Key's operating activities
in conjunction  with borrowings and proceeds from private equity
issuances has been sufficient to meet its debt service and
acquisition, investment and capital expenditure requirements. 
Key believes that cash generated  from operating activities,
together with borrowing from existing and future credit
facilities and proceeds from future equity issuances, will be
sufficient to meet its future debt service requirements and to
make anticipated acquisitions, investments and capital
expenditures.  However, there can be no assurance in this regard
or that the terms available for such financing would be
favorable to Key or that any such future equity issuance would
be at a price per share equal to or greater than the current
market price.  Any such future equity financing would dilute the
interests of current stockholders of Key.  (See "Management's
Discussion and Analysis of Results of Operations and Financial
Condition of Key--Liquidity and Capital Resources".)

Cross-Guaranty and Cross-Collateralization of the New
Indebtedness.  Key has guaranteed WellTech's obligations under
the New Indebtedness and has pledged its assets to secure such
WellTech obligations and WellTech has guaranteed Key's
obligations under the New Indebtedness and has pledged its
assets to secure such Key obligations.  The obligations of Key
and WellTech under the New Indebtedness are also cross
defaulted.  Accordingly, a default under the New Indebtedness by
WellTech or Key could jeopardize the assets of the other party
even if such other  party were not itself in default.  If the
Merger is not consummated on or before April 30, 1996, the New
Indebtedness will be in default unless WellTech refinances its
obligations on or before July 31, 1996 and Key continues to
operate WellTech under the Interim Operations Agreement until
such refinancing.  There can be no assurance, particularly in
light of WellTech's operating history, that it will be able to
refinance its obligations in the event the Merger is not
consummated.  In such event, the lender could foreclose on
substantially all of Key's as well as WellTech's properties and
assets.

Potential Obstacles to Integration of WellTech.  The success of
Key following the Merger will be dependent partially upon Key's
ability to integrate the current management and operations of
WellTech into its ongoing management and operations.  Obstacles
to such integration may arise and some of those obstacles could
adversely affect Key's ongoing operations and performance. 
There can be no assurance that Key will be able effectively to
integrate its management and  operations with those of WellTech
or that administrative and operational efficiencies resulting
from the Merger can be attained.  

Customer Response to the Transactions.  Management of Key
believes that following the Merger Key will be able to provide
its customers with a broader array of products and an increased 
ability to service customer needs.  However, there can be no
assurance that the current Key and WellTech customers will
respond favorable to the Merger.  An unfavorable customer
response to the Merger could have an adverse effect upon the
ongoing operations of Key.

Shares Eligible for Future Sale.  Upon the consummation of the
Merger, giving effect to the Key Charter Amendment, there will
be 10,413,510 shares of Key Common Stock outstanding.  Of such
shares, the 4,929,962 shares of Key Common Stack and New Key
Warrants to purchase an additional 750,000 shares of Key Common
Stock issued to WellTech stockholders pursuant to the Merger
will be freely tradeable without restriction or registration
under the Securities Act, including the shares and New Key
Warrants to be issued to certain stockholders of WellTech, who
will have the benefit of an effective registration statement
under the Securities Act.  Stockholders should be aware and one
group of four affiliated entities will hold approximately 38.2%
of the Key Common Stock outstanding after the Merger.  All but
155,000 of the remaining shares of Key Common Stock currently
outstanding are freely tradeable, although sales of shares held
by "affiliates" of Key are subject to volume and other
limitations imposed by Rule 144 under the Securities Act.  

No predictions can be made as to the effect, if any, that market
sales of shares or the availability of shares for sale will have
on the market price for the Key Common Stock prevailing from
time to time.  Sales of substantial amounts of Key Common Stock
in the public market could adversely affect the market price of
the Key Common Stock.

Possible Volatility of Stock Price.  The Key Common Stock is
traded on the American Stock Exchange.  The closing price of the
Key Common Stock on August 30, 1995, immediately prior to the
announcement of the Merger was 4-15/16, and on January 17, 1996
was 6-1/8.  (See "Price Range of Key Common Stock" for
additional information with respect to the prices of the Key
Common Stock in earlier years.)  The New Key Warrants are a new
issue and there exists no trading market for them.  The volume
of transactions in the Key Common Stock has varied from time to
time although it has, for the most part been limited.  In
addition, the stock market in recent years has experienced price
and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of a specific
company.  These fluctuations could adversely affect the market
price of the Key Common Stock and the New Key Warrants.  (See
"Proposals to be Voted upon at the Key Special Meeting--Item 1: 
The Merger--Certain Covenants --Registrations Rights.") 

No Intention to Pay Dividends.  Key has no intention to pay cash
dividends on the Key Common Stock in the foreseeable future.  In
addition, under the terms of the New Indebtedness, Key is
prohibited from paying cash dividends on its Common Stock.  (See
"Business and Properties of Key--Recent Developments--New
Indebtedness" for a discussion of such restrictions.)

Regulation and Competition in the Well Servicing Industry.  The
oil field service operations, oil and gas production activities
and oil and natural gas drilling are subject to various local,
state and federal laws and regulations intended, among other
things, to protect the environment.  Both Key and WellTech
compete with many national and local independent companies, many
of which have financial and other resources greatly in excess of
those available to Key, WellTech or the surviving entity.

International Investments.  WellTech has made investments in
foreign countries (Russia and Argentina) and Key may continue to
make additional investments in these and other foreign countries
and in companies located or with significant operations outside
the United States.  (See "Business and Properties of
WellTech--Foreign Operations.")  Such investments are subject to
risks and uncertainties relating to the indigenous political,
social and economic structures of those countries.  Risks
specifically related to investments in foreign companies may
include risks of fluctuations in currency valuation,
expropriation, confiscatory taxation and nationalization,
currency conversion restrictions, increased regulation and
approval requirements and governmental policies limiting returns
to foreign investors.  In that connection, stockholders should
be aware the WellTech's contract in Russia was not renewed upon
its expiration in November, 1995.

Anti-Takeover Effect of Certain Provisions of Key's Articles and
By-Laws.  Certain provisions of the Key Articles and the Key
By-Laws could have the effect of making it more difficult for a
third party to acquire, or discouraging a third party from
acquiring, a majority of the outstanding capital stock of Key
and could make it more difficult to consummate certain types of
transactions  involving an actual or potential change in control
of Key, such as a merger, tender offer or proxy contest.  The
most significant of these is the ability of the Board of
Directors to issue, without stockholder approval, preferred
stock containing class voting rights provided, however that the 
Board of Directors may not classify or reclassify shares to
create any class of stock which (i) has more than one vote per
share, (ii) is issued in connection with any shareholder rights
plan, "poison pill" or other anti-takeover measure, or (iii) is
issued for less than fair consideration, as determined in good
faith by the Board of Directors.