Calfrac Announces Second Quarter Results and Expansion Program



    CALGARY, Aug. 6 /CNW/ - Calfrac Well Services Ltd. ("Calfrac" or "the
Company") (TSX-CFW) announces its financial and operating results for the
three months and six months ended June 30, 2009 and expansion program.

    
    HIGHLIGHTS

    -------------------------------------------------------------------------
                    Three Months Ended June 30,     Six Months Ended June 30,
                      2009      2008    Change      2009      2008    Change
    -------------------------------------------------------------------------
    (000s, except       ($)       ($)       (%)       ($)       ($)       (%)
     per share and
     unit data)
    (unaudited)

    Financial

    Revenue        104,727    94,657        11   285,115   240,283        19
    Operating
     income
     (loss)(1)       4,052    (1,008)      502    31,479    28,469        11
    Net loss       (14,770)  (15,469)        5    (9,242)   (1,200)     (670)
      Per share
       - basic       (0.39)    (0.41)        5     (0.24)    (0.03)     (700)
      Per share
       - diluted     (0.39)    (0.41)        5     (0.24)    (0.03)     (700)
    Funds
     provided by
     operations(2)     128        (9)        -    22,841    28,780       (21)
      Per share
       - basic           -         -         -      0.61      0.77       (21)
      Per share
       - diluted         -         -         -      0.61      0.77       (21)
    EBITDA(3)        4,340      (813)      634    30,285    30,234         -
      Per share
       - basic        0.11     (0.02)      650      0.80      0.81        (1)
      Per share
       - diluted      0.11     (0.02)      650      0.80      0.80         -
    Working capital
     (end of
     period)       111,864    94,056        19   111,864    94,056        19
    Shareholders'
     equity (end
     of period)    380,515   364,068         5   380,515   364,068         5
    Weighted
     average common
     Shares
     outstanding
     (No.)
      Basic         37,742    37,728         -    37,742    37,558         -
      Diluted       37,742    37,952        (1)   37,742    37,598         -
    -------------------------------------------------------------------------

    Operating (end
     of period)
    Pumping
     horsepower
     (000s)                                          319       255        25
    Coiled tubing
     units (No.)                                      18        18         -
    Cementing
     units (No.)                                      20        17        18
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Operating income is defined as net income (loss) plus depreciation,
        interest, equity share of net income from long-term investments,
        foreign exchange gains or losses, gains or losses on disposal of
        capital assets, income taxes and non-controlling interest. Management
        believes that operating income is a useful supplemental measure as it
        provides an indication of the financial results generated by
        Calfrac's business segments prior to consideration of how these
        segments are financed or how they are taxed. Operating income is a
        measure that does not have any standardized meaning under generally
        accepted accounting principles ("GAAP") and, accordingly, may not be
        comparable to similar measures used by other companies.

    (2) Funds provided by operations is defined as cash provided by operating
        activities before the net change in non-cash operating assets and
        liabilities. Funds provided by operations is a measure that provides
        shareholders and potential investors with additional information
        regarding the Company's liquidity and its ability to generate funds
        to finance its operations. Management utilizes this measure to assess
        the Company's ability to finance operating activities and capital
        expenditures. Funds provided by operations is a measure that does not
        have any standardized meaning prescribed under GAAP and, accordingly,
        may not be comparable to similar measures used by other companies.

    (3) EBITDA is defined as net income (loss) before interest, taxes,
        depreciation, amortization and non-controlling interest. EBITDA is
        presented because it is frequently used by securities analysts and
        others for evaluating companies and their ability to service debt.
        EBITDA is a measure that does not have any standardized meaning
        prescribed under GAAP and, accordingly, may not be comparable to
        similar measures used by other companies.


    PRESIDENT'S MESSAGE

    I am pleased to present Calfrac's operating and financial highlights for
the three and six months ended June 30, 2009 and discuss our prospects for the
remainder of the year. During the second quarter, our Company:

    -   achieved record levels of fracturing and coiled tubing activity in
        Western Siberia with increased revenue and improved margins;

    -   commenced fracturing operations in the Chicontepec region of Mexico;

    -   experienced strong levels of fracturing and cementing activity in the
        Fayetteville shale play in Arkansas;

    -   continued to improve its strong Environment, Health and Safety (EH&S)
        system through the introduction of several new safety initiatives
        such as the Job Safety Analysis program;

    -   received an award for outstanding safety performance by a major oil
        and natural gas producer in southern Alberta;

    -   concluded a thorough assessment of the workforce in order to assemble
        and retain the strongest possible teams;

    -   suspended primary cementing operations in western Canada and began
        redeploying equipment and personnel to the United States and Mexico
        during the third quarter; and

    -   completed cost reduction measures in Canada and the United States
        through workforce planning which resulted in additional restructuring
        costs of $0.6 million in the second quarter and a total reduction in
        Canadian and United States personnel of approximately 30 percent with
        an estimated cost savings in excess of $2.0 million per month.

    Financial Highlights
    -------------------------------------------------------------------------

    For the three months ended June 30, 2009, the Company generated:

    -   revenue of $104.7 million, an increase of 11 percent from the second
        quarter of 2008;

    -   operating income of $4.1 million versus an operating loss of
        $1.0 million in the comparable period in 2008; and

    -   a net loss of $14.8 million or $0.39 per share compared to
        $15.5 million or $0.41 per share in the same period in 2008.

    For the six months ended June 30, 2009, the Company's results included:

    -   revenue of $285.1 million, an increase of 19 percent from 2008;

    -   a net loss of $9.2 million or $0.24 per share compared to
        $1.2 million or $0.03 per share in the same period in 2008;

    -   funds provided by operations of $22.8 million or $0.61 per share
        versus $28.8 million or $0.77 per share in the same quarter of 2008;
        and

    -   working capital of $111.9 million and $60.0 million of unutilized
        credit facilities at the end of the quarter.

    Overall Calfrac continues to benefit from its solid presence in several
key North American unconventional resource plays, where drilling activity
remains relatively strong and revenue per job is high, as well as the positive
momentum achieved in its international markets.

    Operational Highlights
    -------------------------------------------------------------------------

    Canada
    

    During the second quarter, the Company's fracturing and coiled tubing
activity in western Canada was concentrated in the Horn River unconventional
natural gas resource play located in northeast British Columbia. The low
natural gas price environment plus normal spring break-up weather conditions
significantly reduced shallow gas and coalbed methane activity levels in
central and southern Alberta. In April, Calfrac suspended its primary
cementing operations in Canada and commenced transferring equipment and
personnel to other international operating regions. The cost rationalization
measures instituted early in the second quarter helped to mitigate the
financial impact of the market slowdown.

    United States

    Fracturing and cementing activity levels in Arkansas remained strong
during the second quarter; however, competitive pricing pressures negatively
impacted operating income on a sequential quarterly basis. The low price
environment for natural gas continued to significantly impact fracturing
activity levels in the Rocky Mountain region. In response to these
deteriorating market conditions, the Company transferred personnel and
equipment into Arkansas, after having realigned its cost structure during the
first quarter.

    Russia

    In Russia, fracturing and coiled tubing activity levels reached record
levels, which resulted in strong financial performance from this geographic
segment. The reported Canadian dollar financial results, however, were
negatively impacted by a 15 percent decline in the value of the Russian rouble
from the second quarter of 2008. The five annual contracts signed during the
first quarter are expected to sustain the current high level of equipment
utilization throughout the remainder of the year.

    Mexico

    The completion of a greater number of larger and more technically
demanding jobs in the Burgos field and the commencement of fracturing
operations in the Chicontepec region during May, where the Company began
introducing a new technology to Pemex, resulted in a significant improvement
in year-over-year financial performance in Mexico. The Company expects this
positive momentum to continue throughout the year.

    Argentina

    During the second quarter, activity levels for the Company's cementing
operations in Argentina reached record levels, resulting in improved financial
performance from this geographic market. The Company used a conservative
approach in entering this new market during the second quarter of 2008 and
continues to develop new market opportunities as the Argentina business
environment improves.

    Corporate

    The Company continued to focus on improving its strong EH&S systems by
introducing several initiatives to enhance safe work practices such as Job
Safety Analysis. This program is aligned with the EH&S programs of some of our
major customers and mandates a review of potential site hazards before any job
is performed. During the second quarter, Calfrac was recognized by a major oil
and natural gas producer for its long-standing superior safety performance.
    Calfrac's People Strategy places a strong emphasis on workforce planning,
as understanding current and future staffing needs is essential to meeting
customer expectations. In the second quarter, Calfrac conducted a thorough
assessment of its workforce. Its aim was to assemble and retain the strongest
possible teams as we managed through the current economic downturn. The result
was a workforce reduction in Canada and the United States of approximately 30
percent. Since this reduction, our turnover rate has declined to a very low
level and the quality of our service has continually improved. Additionally,
we recently launched a new benefits plan for Canadian employees to provide
more choice and enhanced coverage for them and their families on a cost
neutral basis to the Company.

    
    Outlook and Business Prospects
    -------------------------------------------------------------------------
    

    The global economic recession has lowered the demand for oil and natural
gas which has led to a significant decline in drilling activity as well as
increased price competition for pressure pumping services in Canada and the
United States. North American natural gas prices are anticipated to remain low
for the near term. In response to these adverse market conditions, the Company
thoroughly realigned its cost structure through significant workforce
reductions in Canada and the United States, wage and retirement contribution
rollbacks as well as cuts to discretionary operating expenses. The Company
also suspended primary cementing operations in the Canadian market during
April and is currently redeploying a good portion of these assets into more
active international markets. These measures have contributed to maintaining
the Company's strong financial foundation entering the third quarter,
including a 19 percent year-over-year increase in working capital to
approximately $112 million.
    Fracturing and coiled tubing activity levels in Canada are highly
uncertain but are anticipated to improve as the year progresses. To date in
the third quarter of 2009, activity levels in northwest Alberta, northeast
British Columbia and southeast Saskatchewan are increasing as certain oil and
natural gas producers increase their focus on unconventional drilling in the
Montney, Horn River and Bakken resource plays. Most recently the Company
completed a large scale operation for a major oil and natural gas company in
the Horn River region as the general contractor employing an array of multiple
services in record time with major cost savings to the customer. These wells
are typically drilled horizontally and require multiple fractures and large
pumping horsepower. Each such well has many times the revenue impact to
Calfrac as compared to conventional well completion methods.
    In the United States, fracturing and cementing activity in the
Fayetteville shale play of Arkansas is expected to remain relatively strong
throughout the remainder of 2009, thanks to strong rates of return on these
highly productive wells. While the Company has experienced significant pricing
pressure in this market, Calfrac believes that pricing has stabilized.
Fracturing activity in the Rocky Mountains region is expected to remain low
until natural gas prices increase significantly due to the typically
higher-cost nature of the natural gas pools drilled in this region.
Consequently, Calfrac reduced its workforce in Colorado and redeployed
equipment and certain key personnel to our operations district in Beebe,
Arkansas. Additional cementing assets were transferred to this region with the
demand increase for the Company's cementing technologies.
    As a result of annual contracts signed with two of Russia's largest oil
and natural gas companies, Calfrac expects that its fracturing and coiled
tubing equipment fleet will remain highly utilized throughout 2009. The higher
equipment utilization has resulted in increased operating efficiencies which
are expected to maintain Calfrac's financial performance in this region at
strong levels of operating income as a percentage of revenue.
    In May, the Company commenced fracturing operations in Poza Rica, Mexico
servicing the Chicontepec oil and natural gas field for Pemex. During the
third quarter, Calfrac commenced cementing operations by redeploying four
cementing crews including bulk transportation and mixing plant equipment with
related infrastructure from Canada into the Chicontepec region, thus
diversifying its pressure pumping operations in Mexico. This expansion is
anticipated to lead to higher levels of overall equipment utilization and to
improve this geographic segment's financial performance.
    In Argentina, Calfrac plans to add a third cementing unit during the
third quarter of 2009 to meet increasing customer demand in this market. The
Company's Latin America management team will continue to evaluate
opportunities to broaden the scale of these operations and continue to support
the growth in Mexico.
    Calfrac is pleased to announce that the Company recently entered into an
agreement to purchase the fracturing assets of a U.S. competitor, Pure Energy
Services, for a total purchase price of approximately $42.8 million. This
price represents a discount to net book value and replacement cost. The assets
include approximately 45,000 of pumping horsepower, high-rate blenders, and
related sand handling equipment. The Company will also acquire certain land
and a rail spur associated with these operations. In addition to this
acquisition, Calfrac is also pleased to announce that its Board of Directors
has approved a $26 million increase to the 2009 capital budget for a revised
total of $41 million. The total approved capital budget for 2009, including
$20 million of carryforward capital from 2008, is now $61 million. The
combination of this asset acquisition and the increment to the capital budget
will allow Calfrac to further expand its geographical footprint in the U.S.
pressure pumping market as well as supplement the Company's fracturing and
coiled tubing equipment fleet for its growing markets within Canada, Russia
and Mexico. In Canada, Calfrac will augment its horsepower capabilities and
expand its deep coiled tubing equipment fleet as the Company continues to gain
a larger presence servicing Canada's unconventional natural gas resource
plays. The increase in the 2009 capital program will also focus on further
expansion opportunities in both Russia and Mexico. The capital allocated to
Russia will target expanding our coiled tubing fleet while Mexican capital
will facilitate the commencement of cementing operations as well as increase
Calfrac's presence in the Mexican fracturing market. These additional capital
expenditures are expected to be funded from the Company's cash on hand, funds
provided by operations and available credit facilities.
    The Company is currently in negotiations with its lenders regarding its
credit facilities. The Company expects to conclude this process in the next
few weeks.
    Overall, short-term demand for pressure pumping services remains
uncertain, particularly in North America. Calfrac's long-term outlook for the
pressure pumping industry, however, remains strong. Calfrac has extensively
rationalized its cost structure and improved its operating efficiencies.
Calfrac's geographical diversification continues to benefit the Company. The
Company believes that the improving financial performance of its international
segments can be extended. The Company is confident that it can maintain its
strong balance sheet and will strive to best execute its strategy through
these difficult market conditions. Calfrac believes that the strengths of its
business model and its conservative approach to the current economic
challenges leave it well-positioned to capitalize on future opportunities.

    
    On behalf of the Board of Directors,

    Douglas R. Ramsay
    President & Chief Executive Officer

    August 6, 2009


    2009 Overview
    -------------------------------------------------------------------------

    In the second quarter of 2009, the Company:

    -   increased revenue by 11 percent to $104.7 million from $94.7 million
        in the second quarter of 2008;

    -   reported a net loss of $14.8 million or $0.39 per share compared to a
        net loss of $15.5 million or $0.41 per share in the comparable 2008
        period;

    -   suspended primary cementing operations in Canada and began
        redeploying a significant portion of this equipment into the United
        States and Latin America during the third quarter;

    -   completed cost reduction measures in Canada and incurred an
        additional $0.6 million of restructuring costs during the second
        quarter of 2009; and

    -   recorded a foreign exchange loss of $0.5 million versus a foreign
        exchange gain of $0.1 million in the comparable period of 2008.

    For the six months ended June 30, 2009 the Company:

    -   increased revenue by 19 percent to $285.1 million from $240.3 million
        in the comparative period in 2008;

    -   reported a net loss of $9.2 million or $0.24 per share compared to a
        net loss of $1.2 million or $0.03 per share in the comparable 2008
        period;

    -   incurred capital expenditures of $25.7 million primarily to bolster
        the Company's fracturing equipment fleet;

    -   combined Calfrac's Mexico and Argentina operations under an
        experienced management team to form a new Latin America division;

    -   initiated cost reduction measures in Canada and the United States
        through workforce planning which resulted in restructuring costs of
        $1.5 million during the first six months of 2009 and a 30 percent
        reduction in personnel; and

    -   incurred a foreign exchange loss of $2.1 million versus a foreign
        exchange gain of $1.5 million in the comparable period of 2008.


    Financial Overview - Three Months Ended June 30, 2009 Versus 2008
    -------------------------------------------------------------------------

    Canada

    -------------------------------------------------------------------------
    Three Months Ended June 30,                   2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                     26,529     32,231        (18)
    Expenses
      Operating                                 25,632     38,744        (34)
      Selling, General and
       Administrative (SG&A)                     2,217      2,299         (4)
                                              -------------------------------
                                                27,849     41,043        (32)
                                              -------------------------------
    Operating loss(1)                           (1,320)    (8,812)        85
    Operating loss (%)                           -5.0%     -27.3%         82
    Fracturing revenue per job ($)             153,680     60,792        153
    Number of fracturing jobs                      143        444        (68)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    

    Revenue

    Revenue from Calfrac's Canadian operations during the second quarter of
2009 decreased by 18 percent to $26.5 million from $32.2 million in the
comparable three-month period of 2008. Canadian fracturing revenue for the
quarter totalled $22.0 million, a decrease of 19 percent from the $27.0
million generated in the corresponding quarter of 2008. The Company completed
143 Canadian fracturing jobs for average revenue of $153,680 per job in the
second quarter of 2009 compared to 444 jobs for average revenue of $60,792 per
job in the comparable period of 2008. The higher average revenue per job was
primarily due to an increase in the proportion of larger jobs completed in the
Horn River unconventional resource plays located in northeast British
Columbia, combined with fewer lower-revenue fracturing jobs being completed in
the shallow gas market of southern Alberta.
    Revenue from the Company's coiled tubing operations in western Canada
increased by $0.4 million from the comparable period in 2008 to $3.8 million
in the second quarter of 2009. During this period Calfrac completed 147 jobs
for average revenue of $25,661 per job compared to 275 jobs for average
revenue of $12,374 per job in the comparable quarter of 2008. The increase in
the average revenue per job was due primarily to an increase in activity in
the deeper reservoirs of western Canada which generates fewer but
higher-revenue jobs, as well as to a reduction in coiled tubing activity in
the shallow gas-producing regions of southern Alberta, which normally generate
a high number of lower-revenue jobs.
    Calfrac's Canadian cementing operations during the second quarter of 2009
realized revenue of $0.8 million, a decrease of 57 percent from the $1.8
million recorded in the corresponding quarter of 2008. For the three months
ended June 30, 2009, the Company completed 38 jobs for average revenue of
$20,556 per job, compared to 166 jobs for average revenue of $11,062 per job
in the comparative period of 2008. The increase in average revenue per job was
due primarily to a higher proportion of jobs being completed in the deeper
basins of western Canada, offset slightly by competitive pricing pressures.
The steep decline in the number of jobs completed was due mainly to the
Company suspending its primary cementing operations in Canada during April
2009.

    Operating Expenses

    Operating expenses in Canada decreased by 34 percent to $25.6 million
during the second quarter of 2009 from $38.7 million in the same period of
2008. The decrease in Canadian operating expenses was mainly due to higher
than normal equipment repair, transportation and personnel expenses during the
second quarter of 2008 offset partially by restructuring costs of $0.6 million
in 2009.

    SG&A Expenses

    SG&A expenses for Calfrac's Canadian operations were $2.2 million during
the second quarter of 2009 versus $2.3 million in the corresponding period of
2008.

    
    United States

    -------------------------------------------------------------------------
    Three Months Ended June 30,                   2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                     42,954     41,767          3
    Expenses
      Operating                                 41,792     29,810         40
      SG&A                                       1,595      1,688         (6)
                                              -------------------------------
                                                43,387     31,498         38
                                              -------------------------------
    Operating income (loss)(1)                    (433)    10,269       (104)
    Operating income (loss) (%)                  -1.0%      24.6%       (104)
    Fracturing revenue per job ($)              78,911     56,820         39
    Number of fracturing jobs                      497        693        (28)
    Cdn$/US$ average exchange rate(2)           1.1670     1.0080         16
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    (2) Source: Bank of Canada.
    

    Revenue

    Revenue from Calfrac's United States operations increased during the
second quarter of 2009 to $43.0 million from $41.8 million in the comparable
quarter of 2008. In the second quarter of 2009, the Company completed 497
fracturing jobs in the United States for average revenue of $78,911 per job
compared to 693 jobs for average revenue of $56,820 per job in the second
quarter of 2008. The increases in United States revenue and revenue per job
were due primarily to higher fracturing activity levels and larger job sizes
in Arkansas combined with the appreciation in the value of the United States
dollar, offset partially by lower fracturing activity levels in Colorado and
competitive pricing pressures.
    During the second quarter of 2009, revenue from Calfrac's cementing
operations in the United States was $3.7 million, an increase of 56 percent
from the corresponding quarter of 2008. For the three months ended June 30,
2009, the Company completed 207 jobs for average revenue of $18,046 per job,
compared to 187 jobs for average revenue of $12,785 per job in the comparative
period of 2008. The increase in average revenue per job was due primarily to
the completion of a higher proportion of long-string cementing jobs in
Arkansas and the appreciation of the U.S. dollar.

    Operating Expenses

    Operating expenses in the United States were $41.8 million for the second
quarter of 2009, an increase of 40 percent from the comparative period in 2008
primarily due to the impact of the higher value of the United States dollar,
increased usage of proppant resulting from the completion of larger fracturing
jobs, higher equipment repair expenses as well as higher operating costs
related to the increased scale and activity levels of the Company's cementing
operations in Arkansas.

    SG&A Expenses

    SG&A expenses in the United States during the second quarter of 2009
decreased by 6 percent from the comparable period in 2008 to $1.6 million
primarily due to lower personnel costs, offset partially by the appreciation
in the value of the United States dollar.

    
    Russia

    -------------------------------------------------------------------------
    Three Months Ended June 30,                   2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                     19,193     15,057         27
    Expenses
      Operating                                 11,719     11,009          6
      SG&A                                         881      1,019        (14)
                                              -------------------------------
                                                12,600     12,028          5
                                              -------------------------------
    Operating income(1)                          6,593      3,029        118
    Operating income (%)                         34.4%      20.1%         71
    Fracturing revenue per job ($)              76,419    135,997        (44)
    Number of fracturing jobs                      157         59        166
    Cdn$/rouble average exchange rate(2)        0.0363     0.0427        (15)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    (2) Source: Bank of Canada.
    

    Revenue

    During the second quarter of 2009, the Company's revenue from Russian
operations increased by 27 percent to $19.2 million from $15.1 million in the
corresponding three-month period of 2008. Fracturing revenue in the second
quarter of 2009 was $12.0 million versus $8.0 million in the corresponding
quarter of 2008. In the second quarter of 2009, the Company completed 157
Russian fracturing jobs for average revenue of $76,419 per job compared to 59
jobs for average revenue of $135,997 per job in the comparable period of 2008.
    Revenue from the Company's coiled tubing operations in Western Siberia
during the second quarter of 2009 increased slightly to $7.2 million from $7.0
million in the comparable period of 2008. During this period, Calfrac
completed 156 jobs for average revenue of $46,124 per job compared to 119 jobs
for average revenue of $59,102 per job in the comparable quarter of 2008.
    In Russia, fracturing and coiled tubing revenue per job for the three
months ended June 30, 2009 decreased from the comparable period in 2008 mainly
due to smaller job sizes, lower annual contract pricing and the depreciation
of the Russian rouble by 15 percent versus the Canadian dollar. Total revenue
during the second quarter of 2009 was higher than the comparative three-month
period in 2008 primarily due to the impact of the above-noted items being
offset by higher fracturing and coiled tubing activity levels.

    Operating Expenses

    Operating expenses in Russia in the second quarter of 2009 were $11.7
million compared to $11.0 million in the corresponding period of 2008. The
increase in operating expenses was primarily due to higher personnel costs
offset partially by the depreciation in the Russian rouble against the
Canadian dollar.

    SG&A Expenses

    SG&A expenses in Russia were $0.9 million for the three-month period
ended June 30, 2009 versus $1.0 million in the same quarter of 2008. The
decrease was primarily due to the depreciation of the Russian rouble.

    
    Latin America

    -------------------------------------------------------------------------
    Three Months Ended June 30,                   2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                     16,051      5,602        187
    Expenses
      Operating                                 12,257      6,115        100
      SG&A                                         645        237        172
                                              -------------------------------
                                                12,902      6,352        103
                                              -------------------------------
    Operating income (loss)(1)                   3,149       (750)       520
    Operating income (loss) (%)                  19.6%     -13.4%        246
    Cdn$/Mexican peso average
     exchange rate(2)                           0.0876     0.0969        (10)
    Cdn$/Argentine peso average
     exchange rate(2)                           0.3088     0.3173         (3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    (2) Source: Bank of Canada.
    

    Revenue

    Calfrac's Latin America operations generated total revenue of $16.1
million during the second quarter of 2009 versus $5.6 million in the
comparable three-month period in 2008. For the three months ended June 30,
2009 and 2008, revenue generated through subcontractors was $3.0 million and
$2.0 million, respectively. The increase in revenue was primarily due to
higher fracturing activity and the completion of larger jobs in Mexico as well
as higher cementing activity levels in Argentina.

    Operating Expenses

    Operating expenses in Latin America for the three months ended June 30,
2009 doubled from the comparative period in 2008 to $12.3 million. This
increase was due primarily to higher fracturing activity and higher product
costs related to the completion of larger fracturing jobs in Mexico combined
with incremental expenses related to the Company's operations in Argentina
which began during the second quarter of 2008.

    SG&A Expenses

    SG&A expenses in Latin America increased by $0.4 million from the
comparable quarter of 2008 to $0.6 million in the second quarter of 2009
primarily due to the Company's expanded scale of operations in Mexico and
Argentina.

    
    Corporate

    -------------------------------------------------------------------------
    Three Months Ended June 30,                   2009       2008     Change
    -------------------------------------------------------------------------
    (000s)                                          ($)        ($)        (%)
    (unaudited)

    Expenses
      Operating                                    630        557         13
      SG&A                                       3,307      4,187        (21)
                                              -------------------------------
                                                 3,937      4,744        (17)
    Operating loss(1)                           (3,937)    (4,744)        17
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    

    Operating Expenses

    Operating expenses primarily relate to manufacturing and R&D personnel
located in the Corporate headquarters who directly support the Company's
global field operations. The 13 percent increase in Corporate operating
expenses from the second quarter of 2008 is mainly due to an increase in the
number of personnel directly supporting the Company's broader scale of
operations.

    SG&A Expenses

    For the three months ended June 30, 2009, Corporate SG&A expenses
decreased by 21 percent from the comparable 2008 period to $3.3 million,
mainly due to lower stock-based compensation expenses.

    Interest and Depreciation Expenses

    The Company's net interest expense of $3.5 million for the second quarter
of 2009 represented an increase of $0.8 million from $2.7 million in the
comparable period of 2008. This increase was primarily due to higher reported
interest expense related to the Company's unsecured senior notes resulting
from the appreciation in the value of the United States dollar and additional
interest expense related to the $30.0 million drawdown on the Company's credit
facilities.
    For the three months ended June 30, 2009, depreciation expense increased
by 24 percent to $15.2 million from $12.3 million in the corresponding quarter
of 2008, mainly as a result of the Company's larger fleet of equipment
operating in North America and the appreciation in the value of the United
States dollar.

    Foreign Exchange Losses (Gains)

    The Company incurred a foreign exchange loss of $0.5 million during the
second quarter of 2009 versus a foreign exchange gain of $0.1 million in the
comparative three-month period of 2008. Foreign exchange gains and losses
arise primarily from the translation of Calfrac's international operations in
Russia, Mexico and Argentina using the temporal method. On a
quarter-over-quarter basis, the change in foreign exchange losses (gains) was
mainly due to the impact of the appreciation of the Canadian dollar on United
States dollar-denominated assets held in the Company's Russian segment during
the second quarter of 2009.

    Income Tax Expenses

    The Company recorded income tax expense of $0.4 million during the second
quarter of 2009 compared to an income tax recovery of $0.3 million in the
comparable period of 2008. The effective income tax rate for the three months
ended June 30, 2009 was negative 3 percent compared to an effective tax rate
of 2 percent in the same quarter of 2008. The increase in total income tax
expense was primarily due to higher profitability in Russia, Mexico and
Argentina offset partially by lower profitability in the United States. The
low effective income tax rate for the second quarter of both 2009 and 2008 is
a reflection of significant losses incurred in Canada for tax purposes where
income taxes are recovered at a significantly lower effective tax rate due to
tax attributes from the amalgamation in 2004 with Denison Energy Inc.

    
    Summary of Quarterly Results

    -------------------------------------------------------------------------
    Three Months Ended             Sept. 30,   Dec. 31,   Mar. 31,   June 30,
                                       2007       2007       2008       2008
    -------------------------------------------------------------------------
    (000s, except per share              ($)        ($)        ($)        ($)
     and unit data)
    (unaudited)

    Financial
    Revenue                         129,585    114,450    145,627     94,657
    Operating income (loss)(1)       34,024     19,872     29,477     (1,008)
    Net income (loss)                16,441      3,653     14,269    (15,469)
      Per share - basic                0.45       0.10       0.38      (0.41)
      Per share - diluted              0.45       0.10       0.38      (0.41)
    Funds provided by
     operations(1)                   28,398     19,582     28,790         (9)
      Per share - basic                0.78       0.53       0.77          -
      Per share - diluted              0.78       0.53       0.77          -
    EBITDA(1)                        34,107     18,790     31,047       (813)
      Per share - basic                0.94       0.51       0.83      (0.02)
      Per share - diluted              0.93       0.51       0.83      (0.02)
    Capital expenditures             11,345     12,101     14,820     19,341
    Working capital (end
     of period)                      99,696     92,156    111,989     94,056
    Shareholders' equity
     (end of period)                336,858    350,915    377,056    364,068
    -------------------------------------------------------------------------

    Operating (end of period)
    Pumping horsepower (000s)           N/A        N/A        232        255
    Coiled tubing units (No.)            17         18         18         18
    Cementing units (No.)                16         16         17         17
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Three Months Ended             Sept. 30,   Dec. 31,   Mar. 31,   June 30,
                                       2008       2008       2009       2009
    -------------------------------------------------------------------------
    (000s, except per share              ($)        ($)        ($)        ($)
     and unit data)
    (unaudited)

    Financial
    Revenue                         151,650    172,430    180,388    104,727
    Operating income (loss)(1)       27,812     25,658     27,427      4,052
    Net income (loss)                11,203      7,861      5,528    (14,770)
      Per share - basic                0.30       0.21       0.15      (0.39)
      Per share - diluted              0.30       0.21       0.15      (0.39)
    Funds provided by
     operations(1)                   27,128     24,838     22,713        128
      Per share - basic                0.72       0.66       0.60          -
      Per share - diluted              0.72       0.66       0.60          -
    EBITDA(1)                        26,983     26,740     25,945      4,340
      Per share - basic                0.71       0.71       0.69       0.11
      Per share - diluted              0.71       0.71       0.69       0.11
    Capital expenditures             18,414     32,233     15,857      9,862
    Working capital (end
     of period)                     104,700    100,575    129,532    111,864
    Shareholders' equity
     (end of period)                378,890    393,476    402,537    380,515
    -------------------------------------------------------------------------

    Operating (end of period)
    Pumping horsepower (000s)           287        287        303        319
    Coiled tubing units (No.)            18         18         18         18
    Cementing units (No.)                18         18         20         20
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    N/A - Not Available


    Financial Overview - Six Months Ended June 30, 2009 Versus 2008
    -------------------------------------------------------------------------

    Canada

    -------------------------------------------------------------------------
    Six Months Ended June 30,                     2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                    111,604    115,316         (3)
    Expenses
      Operating                                 98,649     98,916          -
      SG&A                                       4,938      4,609          7
                                              -------------------------------
                                               103,587    103,525          -
                                              -------------------------------
    Operating income(1)                          8,017     11,791        (32)
    Operating income (%)                          7.2%      10.2%        (29)
    Fracturing revenue per job ($)              93,764     55,011         70
    Number of fracturing jobs                    1,008      1,717        (41)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    

    Revenue

    Revenue from Calfrac's Canadian operations during the first six months of
2009 decreased by 3 percent to $111.6 million from $115.3 million in the
comparable six-month period of 2008. Canadian fracturing revenue for the
period totalled $94.5 million, consistent with the corresponding period of
2008. The Company completed 1,008 Canadian fracturing jobs for average revenue
of $93,764 per job in the first six months of 2009 compared to 1,717 jobs for
average revenue of $55,011 per job in the comparable period of 2008. The
higher average revenue per job was primarily due to an increase in the
proportion of larger jobs completed in the unconventional resource plays
located in northwest Alberta and northeast British Columbia, combined with
fewer lower-revenue fracturing jobs being completed in the shallow gas market
of southern Alberta.
    Revenue from the Company's coiled tubing operations in western Canada
increased by $2.0 million from the comparable period in 2008 to $13.5 million
in the first six months of 2009. During this period Calfrac completed 692 jobs
for average revenue of $19,519 per job compared to 1,311 jobs for average
revenue of $8,769 per job in the comparable period of 2008. The increase in
the average revenue per job was due primarily to an increase in activity in
the deeper reservoirs of western Canada, including the Horn River play, which
generates fewer but higher-revenue jobs, as well as a reduction in coiled
tubing activity in the shallow gas-producing regions of southern Alberta,
which normally generate a high number of lower-revenue jobs.
    Calfrac's Canadian cementing operations during the first six months of
2009 realized revenue of $3.6 million, a 62 percent decrease from the $9.4
million recorded in the corresponding period of 2008. For the six months ended
June 30, 2009, the Company completed 305 jobs for average revenue of $11,745
per job, compared to 1,152 jobs for average revenue of $8,129 per job in the
comparative period of 2008. The increase in average revenue per job was due
primarily to a higher proportion of jobs being completed in the deeper basins
of western Canada, offset slightly by competitive pricing pressures. The steep
decline in the number of jobs was due mainly to the Company suspending its
primary cementing operations in Canada during April 2009 and a reduction in
the number of wells drilled in western Canada during the first quarter of 2009
as compared to the same period of 2008.

    Operating Expenses

    Operating expenses in Canada were $98.6 million during the first six
months of 2009 versus $98.9 million in the same period of 2008. The very
slight decrease in Canadian operating expenses was mainly due to lower fuel
expenses offset by an increase in equipment repair expenses and $1.5 million
of restructuring costs.

    SG&A Expenses

    SG&A expenses for Calfrac's Canadian operations were $4.9 million during
the first six months of 2009, an increase of 7 percent from the corresponding
period of 2008 due primarily to higher personnel costs.

    
    United States

    -------------------------------------------------------------------------
    Six Months Ended June 30,                     2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                    111,496     82,642         35
    Expenses
      Operating                                 90,955     57,236         59
      SG&A                                       3,734      3,774         (1)
                                              -------------------------------
                                                94,689     61,010         55
                                              -------------------------------
    Operating income(1)                         16,807     21,632        (22)
    Operating income (%)                         15.1%      26.2%        (42)
    Fracturing revenue per job ($)              93,575     61,932         51
    Number of fracturing jobs                    1,090      1,280        (15)
    Cdn$/US$ average exchange rate(2)           1.2059     1.0061         20
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    (2) Source: Bank of Canada.
    

    Revenue

    Revenue from Calfrac's United States operations increased significantly
during the first six months of 2009 to $111.5 million from $82.6 million in
the comparable quarter of 2008. In the first six months of 2009, the Company
completed 1,090 fracturing jobs in the United States for average revenue of
$93,575 per job compared to 1,280 jobs for average revenue of $61,932 per job
in the first six months of 2008. The increases in United States revenue and
revenue per job were due primarily to higher fracturing activity in Arkansas
combined with the appreciation in the value of the United States dollar,
offset partially by lower fracturing activity in Colorado.
    Revenue from the Company's United States cementing operations increased
by $6.1 million from the comparable period in 2008 to $9.5 million in the
first six months of 2009. During this period Calfrac completed 466 jobs for
average revenue of $20,385 per job compared to 265 jobs for average revenue of
$12,716 per job in the comparable period of 2008. The increase in the average
revenue per job was due primarily to an increase in the completion of larger
cementing jobs and the impact of the appreciation in the U.S. dollar.

    Operating Expenses

    Operating expenses in the United States were $91.0 million for the first
six months of 2009, an increase of 59 percent from the comparative period in
2008 primarily due to a higher revenue base, the impact of the appreciation of
the United States dollar versus the Canadian dollar, increased usage of
proppant resulting from the completion of larger fracturing jobs, higher
equipment repair expenses due to the same cause, as well as higher operating
costs related to the increased scale and activity levels from the Company's
cementing operations in Arkansas.

    SG&A Expenses

    SG&A expenses in the United States during the first six months of 2009
decreased by 1 percent from the comparable period in 2008 to $3.7 million
primarily due to lower compensation expenses, offset partially by the
appreciation of the United States dollar.

    
    Russia

    -------------------------------------------------------------------------
    Six Months Ended June 30,                     2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                     34,158     29,934         14
    Expenses
      Operating                                 22,629     23,476         (4)
      SG&A                                       1,760      1,719          2
                                              -------------------------------
                                                24,389     25,195         (3)
                                              -------------------------------
    Operating income(1)                          9,769      4,739        106
    Operating income (%)                         28.6%      15.8%         81
    Fracturing revenue per job ($)              75,863    138,735        (45)
    Number of fracturing jobs                      291        121        140
    Cdn$/rouble average exchange rate(2)        0.0365     0.0421        (13)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    (2) Source: Bank of Canada.
    

    Revenue

    During the first six months of 2009, the Company's revenue from Russian
operations increased by 14 percent to $34.2 million from $29.9 million in the
corresponding six-month period of 2008. Fracturing revenue in the first six
months of 2009 was $22.1 million versus $16.8 million in the corresponding
period of 2008. In the first six months of 2009, the Company completed 291
Russian fracturing jobs for average revenue of $75,863 per job compared to 121
jobs for average revenue of $138,735 per job in the comparable period of 2008.
    Revenue from the Company's coiled tubing operations in Western Siberia
during the first six months of 2009 decreased to $12.1 million from $13.1
million in the comparable period of 2008. During this period, Calfrac
completed 265 jobs for average revenue of $45,592 per job compared to 207 jobs
for average revenue of $63,513 per job in the comparable period of 2008.
    In Russia, fracturing and coiled tubing revenue per job for the six
months ended June 30, 2009 decreased from the comparable period in 2008 mainly
due to smaller job sizes, lower annual contract pricing and the depreciation
of the Russian rouble by 13 percent versus the Canadian dollar. Total revenue
during the first six months of 2009 was higher than in the comparative
six-month period in 2008 primarily due to the impact of the above-noted items
being offset by higher fracturing and coiled tubing activity.

    Operating Expenses

    Operating expenses in Russia in the first six months of 2009 were $22.6
million compared to $23.5 million in the corresponding period of 2008. The
decrease in operating expenses was primarily due to the depreciation in the
Russian rouble against the Canadian dollar, offset partially by higher
fracturing and coiled tubing activity.

    SG&A Expenses

    SG&A expenses in Russia were $1.8 million for the six-month period ended
June 30, 2009 versus $1.7 million in the same period of 2008. The slight
increase in SG&A expenses was primarily due to higher occupancy costs, offset
partially by the depreciation of the Russian rouble.

    
    Latin America

    -------------------------------------------------------------------------
    Six Months Ended June 30,                     2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                     27,857     12,391        125
    Expenses
      Operating                                 21,329     13,405         59
      SG&A                                       1,068        342        212
                                              -------------------------------
                                                22,397     13,747         63
                                              -------------------------------
    Operating income (loss)(1)                   5,460     (1,356)       503
    Operating income (loss) (%)                  19.6%     -10.9%        280
    Cdn$/Mexican peso average
     exchange rate(2)                           0.0872     0.0949         (8)
    Cdn$/Argentine peso average
     exchange rate(2)                           0.3265     0.3167          3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    (2) Source: Bank of Canada.
    

    Revenue

    Calfrac's Latin America operations generated total revenue of $27.9
million during the first six months of 2009 versus $12.4 million in the
comparable six-month period in 2008. For the six months ended June 30, 2009
and 2008, revenue generated through subcontractors was $6.1 million and $5.1
million, respectively. The increase in revenue was primarily due to higher
fracturing activity and larger job sizes in Mexico combined with higher
cementing activity in Argentina as these operations commenced during the
second quarter of 2008.

    Operating Expenses

    Operating expenses in Latin America for the six months ended June 30,
2009 increased from the comparative period in 2008 by 59 percent to $21.3
million. This increase was due primarily to a higher revenue base plus
increased product costs in Mexico related to the completion of larger
fracturing jobs, combined with incremental expenses related to the Company's
operations in Argentina which began during the second quarter of 2008.

    SG&A Expenses

    SG&A expenses in Latin America increased by $0.7 million from the
comparable period of 2008 to $1.1 million in the first six months of 2009
primarily due to the Company's expanded scale of operations in Mexico and
Argentina.

    
    Corporate

    -------------------------------------------------------------------------
    Six Months Ended June 30,                     2009       2008     Change
    -------------------------------------------------------------------------
    (000s)                                          ($)        ($)        (%)
    (unaudited)

    Expenses
      Operating                                  1,410      1,087         30
      SG&A                                       7,164      7,250         (1)
                                              -------------------------------
                                                 8,574      8,337          3
    Operating loss(1)                           (8,574)    (8,337)        (3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 16 for further information.
    

    Operating Expenses

    Operating expenses primarily relate to manufacturing and R&D personnel
located in the Corporate headquarters who directly support the Company's
global field operations. The 30 percent increase in Corporate operating
expenses from the first six months of 2008 is mainly due to an increase in the
number of personnel directly supporting the Company's broader scale of
operations.

    SG&A Expenses

    For the six months ended June 30, 2009, Corporate SG&A expenses decreased
by 1 percent to $7.2 million, mainly due to lower stock-based compensation
expenses.

    Interest and Depreciation Expenses

    The Company's net interest expense of $7.2 million for the first six
months of 2009 represented an increase of $1.8 million from $5.4 million in
the comparable period of 2008. This increase was primarily due to higher
reported interest expense related to the Company's unsecured senior notes
resulting from the appreciation in the value of the United States dollar and
additional interest expense related to the $30.0 million drawdown on the
Company's operating and revolving term credit facilities.
    For the six months ended June 30, 2009, depreciation expense increased by
25 percent to $30.1 million from $24.1 million in the corresponding period of
2008, mainly as a result of the Company's larger fleet of equipment operating
in North America and the appreciation in the value of the United States
dollar.

    Foreign Exchange Losses (Gains)

    The Company incurred a foreign exchange loss of $2.1 million during the
first six months of 2009 versus a foreign exchange gain of $1.5 million in the
comparative six-month period of 2008. Foreign exchange gains and losses arise
primarily from the translation of Calfrac's international operations in
Russia, Mexico and Argentina using the temporal method. The change from a
foreign exchange gain to a loss was mainly due to the depreciation of the
Russian rouble against the Canadian dollar in the first quarter of 2009 as
well as the impact of fluctuations in the exchange rate between the Canadian
and United States dollar during the first half of 2009 and its effect on
assets and liabilities held by the Company which are denominated in United
States dollars.

    Income Tax Expenses

    The Company recorded income tax expense of $2.1 million during the first
six months of 2009 and 2008, respectively. The effective income tax rate for
the six months ended June 30, 2009 was negative 31 percent compared to an
effective tax rate of 271 percent in the same period of 2008. The change in
the effective income tax rate for the first six months of 2009 compared to the
first half of 2008 is due to the change in the mix of taxable earnings and
losses incurred in the countries in which the Company operates and the
differing rates of income tax attributable to those earnings and losses.

    
    Liquidity and Capital Resources
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                    Three Months Ended      Six Months Ended
                                               June 30,              June 30,
    -------------------------------------------------------------------------
                                       2009       2008       2009       2008
    -------------------------------------------------------------------------
    (000s)                               ($)        ($)        ($)        ($)
    (unaudited)
    Cash provided by (used in):
      Operating activities           23,026     17,375     37,011     28,953
      Financing activities           (1,887)     1,518     13,113      6,775
      Investing activities          (10,694)   (12,869)   (32,986)   (33,886)
      Effect of exchange rate
       changes on cash and
       cash equivalents              (5,588)      (130)    (3,506)     1,570
    -------------------------------------------------------------------------
    Increase in cash and cash
     equivalents                      4,857      5,894     13,632      3,412
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Operating Activities

    The Company's cash flow from operating activities for the six months
ended June 30, 2009 was $37.0 million versus $29.0 million in the comparable
period in 2008 primarily due to a $14.0 million net change in non-cash working
capital offset partially by a $5.9 million reduction in funds provided by
operations (refer to "Non-GAAP Measures" on page 16). As at June 30, 2009,
Calfrac had working capital of $111.9 million, an increase of $17.8 million
from June 30, 2008. The increase in working capital was primarily due to an
increase in inventory combined with lower accounts payable. The Company
reviewed its quarter-end accounts receivable balance in detail and determined
that a provision for doubtful accounts receivable totalling $1.1 million was
adequate. The majority of this provision related to a customer that filed for
Chapter 11 restructuring under United States bankruptcy law.

    Financing Activities

    Net cash provided by financing activities for the first six months of
2009 was $13.1 million compared to $6.8 million in the comparable period of
2008 as the Company drew $20.0 million on its revolving term credit facility
and repaid $5.0 million on its operating line of credit during the first
quarter of 2009. In addition, Calfrac received proceeds of $8.7 million from
the issuance of common shares during the first six month of 2008 and no such
amounts in the same period of 2009.
    In February 2007, Calfrac completed a private placement of senior
unsecured notes for an aggregate principal amount of US$135.0 million. These
notes are due on February 15, 2015 and bear interest at 7.75 percent per
annum.
    The Company has additional credit facilities of $90.0 million with a
syndicate of Canadian chartered banks. The operating line of credit is $25.0
million with advances bearing interest at either the bank's prime rate plus
0.75 percent, United States base rate plus 0.75 percent, LIBOR plus 2.25
percent or bankers' acceptances plus 2.25 percent. The revolving term loan is
$65.0 million and bears interest at either the bank's prime rate plus 1.0
percent, United States base rate plus 1.0 percent, LIBOR plus 2.5 percent or
bankers' acceptances plus 2.5 percent. As of June 30, 2009, the Company had
drawn $10.0 million on its operating line of credit and $20.0 million on its
revolving term loan, with a further $60 million in immediately available
credit should these funds be required.
    At June 30, 2009, the Company had cash and cash equivalents of $50.1
million. A portion of these funds was invested in short-term investments,
which consisted primarily of an overnight money market fund and is not exposed
to any liquidity issues.
    The Company pays semi-annual dividends to shareholders of $0.05 per
common share at the discretion of the Board of Directors, which qualify as
"eligible dividends" as defined by the Canada Revenue Agency. These dividends
are funded by funds provided by operations and totalled $1.9 million in each
of the first six months of 2009 and 2008.

    Investing Activities

    For the first six months of 2009, Calfrac's net cash used for investing
activities was $33.0 million, down slightly from $33.9 million for the same
period of 2008. Capital expenditures were $25.7 million in the first six
months of 2009 compared to $34.2 million in the same period of 2008. Capital
expenditures in 2009 were primarily related to increasing the pumping capacity
of the Company's fracturing equipment fleet throughout North America.
    On January 11, 2008, the Company acquired the remaining 70 percent of the
common shares of ChemErgy Ltd. that it did not previously own for aggregate
consideration of approximately $6.6 million. The purchase price was satisfied
through the payment to the vendors of approximately $4.8 million in cash, the
transfer of real property at a value of approximately $0.5 million and the
issuance of 71,581 common shares of the Company with a value of approximately
$1.3 million.
    On January 4, 2008, the Company acquired all the shares of 1368303
Alberta Ltd. from a Canadian competitor for cash and share consideration
totalling approximately $2.7 million. The Company issued 78,579 common shares
with a value of approximately $1.3 million in conjunction with the
acquisition, in addition to approximately $1.4 million of cash. All of the
consideration paid was assigned to capital assets, as the acquired company had
no assets or liabilities other than fracturing equipment.
    Additionally, net cash used for investing activities was impacted by the
net change in non-cash working capital from the purchase of capital assets.
    The effect of changes in foreign exchange rates on the Company's cash and
cash equivalents during the first six months of 2009 was a loss of $3.5
million versus a gain of $1.6 million during the same period of 2008. These
gains relate to cash and cash equivalents held by the Company in a foreign
currency.
    With its strong working capital position, credit facilities and
anticipated funds provided by operations, the Company expects to have adequate
resources to fund its financial obligations and planned capital expenditures
for 2009 and beyond.

    Proposed Acquisition

    Subsequent to June 30, 2009, the Company entered into an agreement to
purchase the fracturing assets of a competitor for approximately $42.8
million. The purchase price is payable in cash less the Canadian dollar
equivalent of an assumed debt of US$3.2 million. In addition, the Company will
acquire approximately $3.5 million of the seller's parts and materials
inventory. The transaction is expected to close on or about August 14, 2009.
This acquisition is expected to be funded from the Company's cash on hand and
available credit facilities. These fracturing assets are anticipated to be
partially utilized within Calfrac's operations in the United States and the
remaining equipment will be redeployed to support the Company's pressure
pumping operations in Canada, Russia and Mexico.

    Outstanding Share Data

    The Company is authorized to issue an unlimited number of common shares.
Employees have been granted options to purchase common shares under the
Company's shareholder-approved stock option plan. The number of shares
reserved for issuance under the stock option plan is equal to 10 percent of
the Company's issued and outstanding common shares. As at July 31, 2009, there
were 37,741,561 common shares issued and outstanding, and 2,715,875 options to
purchase common shares.

    
    Advisories
    -------------------------------------------------------------------------

    Forward-Looking Statements
    

    In order to provide Calfrac shareholders and potential investors with
information regarding the Company and its subsidiaries, including management's
assessment of Calfrac's plans and future operations, certain statements
contained in this press release, including statements that contain words such
as "anticipates", "can", "may", "expect", "believe", "intend", "forecast",
"will", or similar words suggesting future outcomes, are forward-looking
statements. Forward-looking statements in this document include, but are not
limited to, statements with respect to future capital expenditures, future
financial resources, future oil and gas well activity, outcome of specific
events, trends in the oil and natural gas industry and the Company's growth
prospects including, without limitation, its international growth strategy and
prospects. These statements are derived from certain assumptions and analyses
made by the Company based on its experience and interpretation of historical
trends, current conditions, expected future developments and other factors
that it believes are appropriate in the circumstances, including assumptions
related to commodity pricing, North American drilling activity and the
expectation that access to capital will continue to be restricted for many of
Calfrac's customers. Forward-looking statements are subject to a number of
known and unknown risks and uncertainties that could cause actual results to
differ materially from the Company's expectations. The most significant risk
factors to Calfrac relate to prevailing economic conditions; commodity prices;
sourcing, pricing and availability of raw materials, component parts,
equipment, suppliers, facilities and skilled personnel; dependence on major
customers; uncertainties in weather and temperature affecting the duration of
the service periods and the activities that can be completed; and regional
competition. Readers are cautioned that the foregoing list of risks and
uncertainties is not exhaustive. Further information about these risks and
uncertainties may be found under "Business Risks" below.
    Consequently, all of the forward-looking statements made in this press
release are qualified by these cautionary statements and there can be no
assurance that actual results or developments anticipated by the Company will
be realized, or that they will have the expected consequences or effects on
the Company or its business or operations. The Company assumes no obligation
to update publicly any such forward-looking statements, whether as a result of
new information, future events or otherwise, except as required pursuant to
applicable securities laws.

    Business Risks

    The business of Calfrac is subject to certain risks and uncertainties.
Prior to making any investment decision regarding Calfrac, investors should
carefully consider, among other things, the risk factors set forth in the
Company's most recently filed Annual Information Form, which risk factors are
incorporated by reference herein.
    The Annual Information Form is available through the Internet on the
Canadian System for Electronic Document Analysis and Retrieval (SEDAR), which
can be accessed at www.sedar.com. Copies of the Annual Information Form may
also be obtained on request without charge from Calfrac at 411 - 8th Avenue
S.W., Calgary, Alberta T2P 1E3, or at www.calfrac.com, or by facsimile at
403-266-7381.

    Non-GAAP Measures

    Certain measures in this press release do not have any standardized
meaning as prescribed under Canadian GAAP and are therefore considered
non-GAAP measures. These measures include operating income, funds provided by
operations and EBITDA. These measures may not be comparable to similar
measures presented by other entities. These measures have been described and
presented in this press release in order to provide shareholders and potential
investors with additional information regarding the Company's financial
results, liquidity and its ability to generate funds to finance its
operations. Management's use of these measures has been disclosed further in
this press release as these measures are discussed and presented.

    Additional Information

    Further information regarding Calfrac Well Services Ltd., including the
most recently filed Annual Information Form, can be accessed on the Company's
website at www.calfrac.com or under the Company's public filings found at
www.sedar.com.

    Second Quarter Conference Call

    Calfrac will be conducting a conference call for interested analysts,
brokers, investors and news media representatives to review its 2009 second
quarter results at 10:00 a.m. (Mountain Daylight Time) on Friday, August 7,
2009. The conference call dial-in number is 1-866-250-4909 or 416-644-3430.
The seven-day replay numbers are 1-877-289-8525 or 416-640-1917 (once
connected, enter 21312102 followed by the number sign). A webcast of the
conference call may be accessed via the Company's website at www.calfrac.com.



    
    CONSOLIDATED BALANCE SHEETS
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    As at                                                June 30,   December
                                                            2009    31, 2008
    -------------------------------------------------------------------------
    (000s) (unaudited)                                        ($)         ($)

    ASSETS
    Current assets
      Cash and cash equivalents                           50,124      36,492
      Accounts receivable                                 74,666     120,048
      Income taxes recoverable                             5,160       6,681
      Inventory                                           36,203      41,123
      Prepaid expenses and deposits                        6,617       5,813
    -------------------------------------------------------------------------
                                                         172,770     210,157
    Capital assets                                       446,547     459,874
    Goodwill                                              10,523      10,523
    Future income taxes                                   17,062      11,218
    -------------------------------------------------------------------------
                                                         646,902     691,772
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
      Accounts payable and accrued liabilities            49,306      94,582
      Bank loan (note 4)                                  10,000      15,000
      Current portion of long-term debt (note 5)           1,600           -
    -------------------------------------------------------------------------
                                                          60,906     109,582
    Long-term debt (note 5)                              171,430     159,899
    Other long-term liabilities                            1,353       1,368
    Future income taxes                                   23,989      24,815
    Deferred credit                                        8,586       2,588
    Non-controlling interest                                 123          44
    -------------------------------------------------------------------------
                                                         266,387     298,296
    -------------------------------------------------------------------------
    Shareholders' equity
    Capital stock (note 6)                               168,813     168,813
    Contributed surplus (note 7)                           9,039       7,297
    Retained earnings                                    200,523     211,652
    Accumulated other comprehensive income                 2,140       5,714
    -------------------------------------------------------------------------
                                                         380,515     393,476
    -------------------------------------------------------------------------
                                                         646,902     691,772
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Contingencies (note 10)
    Subsequent event (note 13)

    See accompanying notes to the consolidated financial statements.


    CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                  Three Months Ended        Six Months Ended
                                             June 30,                June 30,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    (000s, except per share           ($)         ($)         ($)         ($)
     data) (unaudited)

    Revenue                      104,727      94,657     285,115     240,283
    -------------------------------------------------------------------------
    Expenses
      Operating                   92,029      86,234     234,973     194,120
      Selling, general and
       administrative              8,646       9,431      18,663      17,694
      Depreciation                15,187      12,285      30,115      24,095
      Interest, net                3,500       2,687       7,188       5,381
      Equity share of income
       from long-term investments      -           -           -        (122)
      Foreign exchange losses
       (gains)                       541        (84)       2,095      (1,509)
      Gain on disposal of capital
       assets                       (829)      (111)        (901)       (134)
    -------------------------------------------------------------------------
                                 119,074    110,442      292,133     239,525
    -------------------------------------------------------------------------
    Income (loss) before income
     taxes and non-controlling
     interest                    (14,347)   (15,785)      (7,018)        758
    -------------------------------------------------------------------------
    Income taxes
      Current                        827     (2,320)       1,461      (2,422)
      Future                        (445)     2,043          683       4,474
    -------------------------------------------------------------------------
                                     382       (277)       2,144       2,052
    -------------------------------------------------------------------------
    Loss before non-controlling
     interest                    (14,729)   (15,508)      (9,162)     (1,294)
    Non-controlling interest          41        (39)          80         (94)
    -------------------------------------------------------------------------
    Net loss for the period      (14,770)   (15,469)      (9,242)     (1,200)
    Retained earnings, beginning
     of period                   217,180    212,308      211,652     198,039
    Dividends                     (1,887)    (1,892)      (1,887)     (1,892)
    -------------------------------------------------------------------------
    Retained earnings, end of
     period                      200,523    194,947      200,523     194,947
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Loss per share
      Basic                        (0.39)     (0.41)       (0.24)      (0.03)
      Diluted                      (0.39)     (0.41)       (0.24)      (0.03)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the consolidated financial statements.


    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND ACCUMULATED
    OTHER COMPREHENSIVE INCOME
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                  Three Months Ended        Six Months Ended
                                             June 30,                June 30,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    (000s) (unaudited)                ($)         ($)         ($)         ($)

    Net loss for the period      (14,770)    (15,469)     (9,242)     (1,200)
    Other comprehensive income
      Change in foreign currency
       translation adjustment     (6,132)       (277)     (3,574)      1,287
    -------------------------------------------------------------------------
    Comprehensive income (loss)  (20,902)    (15,746)    (12,816)         87
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated other
     comprehensive income (loss),
     beginning of period           8,272      (4,640)      5,714      (6,204)
      Other comprehensive income
       (loss) for the period      (6,132)       (277)     (3,574)      1,287
    -------------------------------------------------------------------------
    Accumulated other
     comprehensive income (loss),
     end of period                 2,140      (4,917)      2,140      (4,917)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the consolidated financial statements.



    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                  Three Months Ended        Six Months Ended
                                             June 30,                June 30,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    (000s) (unaudited)                ($)         ($)         ($)         ($)

    CASH PROVIDED BY (USED IN)
     OPERATING ACTIVITIES
      Net loss for the period    (14,770)    (15,469)     (9,242)     (1,200)
      Items not involving cash
        Depreciation              15,187      12,285      30,115      24,095
        Amortization of debt
         issue costs                 177         153         364         305
        Stock-based compensation     767       1,129       1,742       1,456
        Equity share of income
         from long-term
         investments                   -           -           -        (122)
        Gain on disposal of
         capital assets             (829)       (111)       (901)       (134)
        Future income taxes
         (recovery)                 (445)      2,043         683       4,474
        Non-controlling interest      41         (39)         80         (94)
    -------------------------------------------------------------------------
                                     128          (9)     22,841      28,780
      Net change in non-cash
       operating assets and
       liabilities                22,898      17,384      14,170         173
    -------------------------------------------------------------------------
                                  23,026      17,375      37,011      28,953
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Bank loan proceeds               -           -       5,000           -
      Issuance of long-term debt       -           -      20,000           -
      Bank loan repayments             -           -     (10,000)          -
      Net proceeds on issuance of
       common shares                   -       3,410           -       8,667
      Dividends                   (1,887)     (1,892)     (1,887)     (1,892)
    -------------------------------------------------------------------------
                                  (1,887)      1,518      13,113       6,775
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of capital assets  (9,862)    (19,341)    (25,719)    (34,160)
      Proceeds on disposal of
       capital assets              1,143         153       1,174         258
      Acquisitions, net of cash
       acquired                        -           -           -      (6,117)
      Long-term investments and
       other                           -           -           -         243
      Net change in non-cash
       working capital from
       purchase of capital
       assets                     (1,975)      6,319      (8,441)      5,890
    -------------------------------------------------------------------------
                                 (10,694)    (12,869)    (32,986)    (33,886)
    -------------------------------------------------------------------------
    Effect of exchange rate
     changes on cash and cash
     equivalents                  (5,588)       (130)     (3,506)      1,570
    -------------------------------------------------------------------------
    Increase in cash position      4,857       5,894      13,632       3,412
    Cash and cash equivalents,
     beginning of period          45,267      36,622      36,492      39,104
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                50,124      42,516      50,124      42,516
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the consolidated financial statements.



    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    -------------------------------------------------------------------------

    FOR THE SIX MONTHS ENDED JUNE 30, 2009
    (figures in text and tables are in 000s except share data and certain
    other exceptions as indicated) (unaudited)

    1.  BASIS OF PRESENTATION

        The interim financial statements of Calfrac Well Services Ltd. (the
        "Company") do not conform in all respects to the requirements of
        generally accepted accounting principles (GAAP) for annual financial
        statements. The interim financial statements should be read in
        conjunction with the most recent annual financial statements.

    2.  SEASONALITY OF OPERATIONS

        The Company's Canadian business is seasonal in nature. The lowest
        activity levels are typically experienced during the second quarter
        of the year when road weight restrictions are in place and access to
        wellsites in Canada is reduced.

    3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        (a) The interim financial statements follow the same accounting
            policies and methods of application as the most recent annual
            financial statements, except for the adoption of the Canadian
            Institute of Chartered Accountants (CICA) Handbook Section 3064
            Goodwill and Intangible Assets. Section 3064 replaces the
            previous Section 3062 and establishes standards for the
            recognition, measurement, presentation and disclosure of
            intangible assets and goodwill subsequent to its initial
            recognition. The adoption of Section 3064 has not had an impact
            on the Company's consolidated financial statements, as the
            provisions relating to goodwill are unchanged from the previous
            standard and the Company has no recognizable intangible assets.

        (b) In 2006, the CICA Accounting Standards Board (AcSB) adopted a
            strategic plan for the direction of accounting standards in
            Canada. As part of that plan, the AcSB confirmed in February 2008
            that International Financial Reporting Standards (IFRS) will
            replace Canadian GAAP in 2011 for profit-oriented Canadian
            publicly accountable enterprises. As the Company will be required
            to report its results in accordance with IFRS starting in 2011,
            the Company has developed its project plan which includes the
            following key elements:

            - determine appropriate changes to accounting policies and
              required amendments to financial disclosures;

            - identify and implement changes in associated processes and
              information systems;

            - comply with internal control requirements; and

            - educate and train internal and external stakeholders.

            The Company is currently analysing accounting policy alternatives
            and identifying implementation options for the areas that have
            been identified as having the greatest potential impact to the
            Company's financial statements or the greatest risk in terms of
            complexity to implement. The areas identified to date include
            capital assets, impairment and foreign currency translation.

    4.  BANK LOAN

        The Company has an operating loan facility of $25,000 payable on
        demand and bearing interest at the bank's prime rate plus
        0.75 percent, of which $10,000 was drawn at June 30, 2009 (December
        31, 2008 - $15,000). The facility is secured by a general security
        agreement over all Canadian and U.S. assets of the Company.

    5.  LONG-TERM DEBT

        ---------------------------------------------------------------------
        As at                                            June 30,   December
                                                            2009    31, 2008
        ---------------------------------------------------------------------
        (000s)                                                ($)         ($)
        US$135,000 senior unsecured notes, due
         February 15, 2015 bearing interest at 7.75%,
         payable semi-annually                           157,005     164,430
        Less: unamortized debt issue costs                (3,975)     (4,531)
        ---------------------------------------------------------------------
                                                         153,030     159,899
        $65,000 extendible revolving term loan facility
          bearing interest at the bankers' acceptance
          rate plus stamping fees of 2.50%, secured by a
          general security agreement over all Canadian
          and U.S. assets of the Company                  20,000           -
        ---------------------------------------------------------------------
                                                         173,030     159,899
        Less: current portion of long-term debt           (1,600)          -
        ---------------------------------------------------------------------
                                                         171,430     159,899
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The fair value of the senior unsecured notes based on the closing
        price at June 30, 2009 was $135,024 (December 31, 2008 - $77,282).

        The extendible revolving term loan facility is repayable in 15 equal
        quarterly principal instalments of $800 commencing March 31, 2010
        plus a final payment of $8,000 on December 31, 2013, assuming the
        facility is not extended. The term and commencement of principal
        repayments under the facility may be extended by one year on each
        anniversary at the request of the Company and acceptance by the
        lenders. The Company also has the ability to prepay principal without
        penalty.

    6.  CAPITAL STOCK

        Authorized capital stock consists of an unlimited number of common
        shares.

        ---------------------------------------------------------------------
        Continuity of Common Shares (year-to-date)        Shares      Amount
        ---------------------------------------------------------------------
                                                            (No.)     ($000s)
        Balance, January 1, 2009                      37,741,561     168,813
        Issued upon exercise of stock options                  -           -
        Issued on acquisitions                                 -           -
        Purchased under Normal Course Issuer Bid               -           -
        ---------------------------------------------------------------------
        Balance, June 30, 2009                        37,741,561     168,813
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The weighted average number of common shares outstanding for the six
        months ended June 30, 2009 was 37,741,561 basic and 37,741,561
        diluted (2008 - 37,557,750 basic and 37,597,814 diluted). The
        difference between basic and diluted shares for the six months ended
        June 30, 2008 was attributable to the dilutive effect of stock
        options issued by the Company and shares held in trust. All of the
        outstanding options disclosed in note 8 could be potentially dilutive
        in the future; however they were not included in the calculation of
        diluted shares for the six months ended June 30, 2009, as they would
        have an anti-dilutive effect.

    7.  CONTRIBUTED SURPLUS

        ---------------------------------------------------------------------
        Continuity of Contributed Surplus (year-to-date)              Amount
        ---------------------------------------------------------------------
        (000s)                                                            ($)
        Balance, January 1, 2009                                       7,297
          Stock options expensed                                       1,742
          Stock options exercised                                          -
        ---------------------------------------------------------------------
        Balance, June 30, 2009                                         9,039
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    8.  STOCK OPTIONS

        ---------------------------------------------------------------------
                                                                     Average
                                                                    Exercise
        Continuity of Stock Options (year-to-date)       Options       Price
        ---------------------------------------------------------------------
                                                            (No.)         ($)
        Balance, January 1, 2009                       2,043,344       21.69
          Granted during the period                      847,500        8.41
          Exercised for common shares                          -           -
          Forfeited                                     (102,006)      18.67
          Expired                                        (35,000)      37.86
        ---------------------------------------------------------------------
        Balance, June 30, 2009                         2,753,838       17.51
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Stock options vest equally over three or four years and expire three-
        and-one-half or five years from the date of grant. The exercise price
        of outstanding options ranges from $8.35 to $31.16 with a weighted
        average remaining life of 3.36 years. When stock options are
        exercised the proceeds, together with the amount of compensation
        expense previously recorded in contributed surplus, are added to
        capital stock.

    9.  CAPITAL STRUCTURE

        The Company's capital structure is comprised of shareholders' equity
        and long-term debt. The Company's objectives in managing capital are
        (i) to maintain flexibility so as to preserve the Company's access to
        capital markets and its ability to meet its financial obligations,
        and (ii) to finance growth, including potential acquisitions.

        The Company manages its capital structure and makes adjustments in
        light of changing market conditions and new opportunities, while
        remaining cognizant of the cyclical nature of the oilfield services
        sector. To maintain or adjust its capital structure, the Company may
        revise its capital spending, adjust dividends paid to shareholders,
        issue new shares or new debt or repay existing debt.

        The Company monitors its capital structure and financing requirements
        using, amongst other parameters, the ratio of long-term debt to cash
        flow. Cash flow for this purpose is defined as cash provided by
        operating activities before the net change in non-cash operating
        assets and liabilities as reflected in the consolidated statement of
        cash flows. The ratio of long-term debt to cash flow does not have
        any standardized meaning prescribed under GAAP, and may not be
        comparable to similar measures used by other companies.

        At June 30, 2009, the long-term debt to cash flow ratio was 2.31:1
        (December 31, 2008 - 1.98:1) calculated on a 12-month trailing basis
        as follows:

        ---------------------------------------------------------------------
        As at                                            June 30,   December
                                                            2009    31, 2008
        ---------------------------------------------------------------------
        (000s)                                                ($)         ($)
        Long-term debt (net of unamortized debt issue
         costs) (note 5)                                 173,030     159,899
        Cash flow                                         74,808      80,747
        ---------------------------------------------------------------------
        Long-term debt to cash flow ratio                   2.31        1.98
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The Company is subject to certain financial covenants relating to
        working capital, leverage and the generation of cash flow in respect
        of its operating and revolving credit facilities. These covenants are
        monitored on a monthly basis. The Company is in compliance with all
        such covenants.

        The Company's capital management objectives, evaluation measures and
        targets have remained unchanged over the periods presented.

    10. CONTINGENCIES

        Greek Operations

        As a result of the acquisition and amalgamation with Denison Energy
        Inc. ("Denison") in 2004, the Company assumed certain legal
        obligations relating to Denison's Greek operations.

        In 1998, North Aegean Petroleum Company E.P.E. ("NAPC"), a Greek
        subsidiary of a consortium in which Denison participated (and which
        is now a majority-owned subsidiary of the Company), terminated
        employees in Greece as a result of the cessation of its oil and gas
        operations in that country. Several groups of former employees have
        filed claims against NAPC and the consortium alleging that their
        termination was invalid and that their severance pay was improperly
        determined.

        In 1999, the largest group of plaintiffs received a ruling from the
        Athens Court of First Instance that their termination was invalid and
        that compensation amounting to approximately $11,112 (6,846 euros)
        plus interest was due to the former employees. This decision was
        appealed to the Athens Court of Appeal, which allowed the appeal in
        2001 and annulled the above-mentioned decision of the Athens Court of
        First Instance. The said group of former employees filed an appeal
        with the Supreme Court of Greece, which was heard on May 29, 2007.
        The Supreme Court of Greece allowed the appeal and sent the matter
        back to the Athens Court of Appeal for the consideration of damages.
        On June 3, 2008, the Athens Court of Appeal rejected NAPC's appeal of
        the Supreme Court of Greece's decision, and reinstated the award of
        the Athens Court of First Instance, which decision has been further
        appealed and is scheduled to be heard by the Supreme Court of Greece
        on November 3, 2009. Counsel to NAPC has obtained a judicial order
        entitling NAPC to obtain certain employment information in respect of
        the plaintiffs which is required in order to assess the extent to
        which the plaintiffs have mitigated any damages which may otherwise
        be payable. NAPC intends to vigorously defend the appeal decision
        before the Supreme Court of Greece both in relation to the merits of
        the plaintiffs' case as well as in respect of the quantum of any
        damages which may be awarded. In the event that an adverse ruling is
        issued by the Supreme Court of Greece, NAPC and the Company intend to
        assess available rights of appeal to any other levels of court in any
        jurisdiction where such an appeal is warranted.

        Several other smaller groups of former employees have filed similar
        cases in various courts in Greece. One of these cases was heard by
        the Athens Court of First Instance on January 18, 2007. By judgment
        rendered November 23, 2007, the plaintiff's allegations were
        partially accepted, and the plaintiff was awarded damages of
        approximately $55 (34 euros), plus interest. NAPC's appeal of this
        decision was heard on June 2, 2009, but to date no judgment has been
        rendered. Another one of the lawsuits was heard by the Supreme Court
        of Greece on November 6, 2007, at which date the appeal of the
        plaintiffs was denied for technical reasons due to improper service.
        A rehearing of this appeal has been scheduled for September 22, 2009.
        The remaining action, which is seeking salaries in arrears of
        approximately $713 (439 euros) plus interest, is scheduled to be
        heard before the Athens Court of First Instance on October 1, 2009.

        The direction and financial consequences of the potential decisions
        in these actions cannot be determined at this time and, consequently,
        no provision has been recorded in these financial statements.

    11. COMPARATIVES

        Certain comparatives have been reclassified to conform with the
        financial statement presentation adopted in the current period.

    12. SEGMENTED INFORMATION

        The Company's activities are conducted in four geographic segments:
        Canada, Russia, the United States and Latin America. All activities
        are related to fracturing, coiled tubing, cementing and well
        stimulation services for the oil and gas industry.

        ---------------------------------------------------------------------
                                                                      United
                                              Canada      Russia      States
        ---------------------------------------------------------------------
        (000s)                                    ($)         ($)         ($)
        ---------------------------------------------------------------------
        Three Months Ended June 30, 2009
        Revenue                               26,529      19,193      42,954
        Operating income (loss)(1)            (1,320)      6,593        (433)
        Segmented assets                     267,928     106,641     240,777
        Capital expenditures                   2,586       1,077       5,796
        Goodwill                               7,236         979       2,308
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Three Months Ended June 30, 2008
        Revenue                               32,231      15,057      41,767
        Operating income (loss)(1)            (8,812)      3,029      10,269
        Segmented assets                     257,807     105,606     204,838
        Capital expenditures                   8,078         343       9,902
        Goodwill                               7,236         979       2,308
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Six Months Ended June 30, 2009
        Revenue                              111,604      34,158     111,496
        Operating income (loss)(1)             8,017       9,769      16,807
        Segmented assets                     267,928     106,641     240,777
        Capital expenditures                  12,392       1,436      10,790
        Goodwill                               7,236         979       2,308
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Six Months Ended June 30, 2008
        Revenue                              115,316      29,934      82,642
        Operating income (loss)(1)            11,791       4,739      21,632
        Segmented assets                     257,807     105,606     204,838
        Capital expenditures                  11,110         886      19,345
        Goodwill                               7,236         979       2,308
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
                                               Latin                  Consol-
                                             America   Corporate      idated
        ---------------------------------------------------------------------
        (000s)                                    ($)         ($)         ($)
        ---------------------------------------------------------------------
        Three Months Ended June 30, 2009
        Revenue                               16,051           -     104,727
        Operating income (loss)(1)             3,149      (3,937)      4,052
        Segmented assets                      31,556           -     646,902
        Capital expenditures                     403           -       9,862
        Goodwill                                   -           -      10,523
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Three Months Ended June 30, 2008
        Revenue                                5,602           -      94,657
        Operating income (loss)(1)              (750)     (4,744)     (1,008)
        Segmented assets                      16,765           -     585,016
        Capital expenditures                   1,018           -      19,341
        Goodwill                                   -           -      10,523
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Six Months Ended June 30, 2009
        Revenue                               27,857           -     285,115
        Operating income (loss)(1)             5,460      (8,574)     31,479
        Segmented assets                      31,556           -     646,902
        Capital expenditures                   1,101           -      25,719
        Goodwill                                   -           -      10,523
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Six Months Ended June 30, 2008
        Revenue                               12,391           -     240,283
        Operating income (loss)(1)            (1,356)     (8,337)     28,469
        Segmented assets                      16,765           -     585,016
        Capital expenditures                   2,819           -      34,160
        Goodwill                                   -           -      10,523
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        (1) Operating income (loss) is defined as net income (loss) plus
            depreciation, interest, equity share of net income from long-term
            investments, foreign exchange gains or losses, gains or losses on
            disposal of capital assets, income taxes and non-controlling
            interest.

        The following table sets forth consolidated revenue by service line:

        ---------------------------------------------------------------------
                                  Three Months Ended        Six Months Ended
                                             June 30,                June 30,
                                    2009        2008        2009        2008
        ---------------------------------------------------------------------
        (000s)                        ($)         ($)         ($)         ($)
        Fracturing                84,997      77,617     237,789     197,407
        Coiled tubing             10,967      10,436      25,589      24,644
        Cementing                  5,780       4,638      15,602      13,145
        Other                      2,983       1,966       6,135       5,087
        ---------------------------------------------------------------------
                                 104,727      94,657     285,115     240,283
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    13. SUBSEQUENT EVENT

        Subsequent to June 30, 2009, the Company entered into an agreement to
        purchase the fracturing assets of a competitor for approximately
        $42.8 million. The purchase price is payable in cash less the
        Canadian dollar equivalent of an assumed debt of US$3.2 million. In
        addition, the Company will acquire approximately $3.5 million of the
        seller's parts and materials inventory. The transaction is expected
        to close on or about August 14, 2009.
    

    %SEDAR: 00002062E




For further information:

For further information: Douglas R. Ramsay, President and Chief
Executive Officer, Telephone: (403) 266-6000, Fax: (403) 266-7381; Laura A.
Cillis, Senior Vice President, Finance and Chief Financial Officer, Telephone:
(403) 266-6000, Fax: (403) 266-7381; Tom J. Medvedic, Senior Vice President,
Corporate Development, Telephone: (403) 266-6000, Fax: (403) 266-7381


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