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Key management in sensor networks is a challenging issue due to the limited resource constraints of sensors. Many proposed schemes are based on key pre-distribution using pre-deployment knowledge that is difficult to obtain where nodes are randomly deployed. For this reason, location dependent key scheme (LDK) has been proposed in which nodes generate keys depending on the relative locations without deployment knowledge. In LDK scheme, each pair of communicating nodes find common keys between them by transmitting their own keys and then comparing them. However, this requires transmitting non-common keys which increase communication overhead. This is not suitable for the battery-powered nodes. In this paper, we propose an efficient location dependent key management scheme in which each pair of nodes find common keys by transmitting key indexes through successive applications of one-way hash function. Since each node only transmits key indexes instead of all keys that the node has, the total communication overhead in the network is decreased. We show that our scheme performs better than previous scheme through analysis and simulation results.