Flint Energy Services Ltd. Announces Q3 2007 Results



    (TSX: FES)

    CALGARY, Nov. 8 /CNW/ - Flint Energy Services Ltd. ("Flint" or the
"Company") announced today that net earnings for the quarter ended September
30, 2007 were $12.2 million on revenues of $424.3 million compared to net
earnings of $12.9 million on revenues of $341.5 million for the same quarter
in 2006. Funds provided by operations before changes in non-cash working
capital for the three-month period were $33.5 million compared to $23.6
million for the comparative period. Diluted earnings per share for the third
quarter of 2007 were $0.25 compared to $0.33 for the third quarter in 2006.

    Highlights

    Revenue increased by $82.8 million or 24.2%, primarily as a result of the
Oilfield Transportation and the Canadian portion of the Tubular Management and
Manufacturing operations being part of the company through out 2007. During
the third quarter of 2007, these two groups contributed $36.6 million and
$17.1 million in revenue respectively. Oilfield Transportation revenue was
significantly below expectations due to demand for its services being closely
tied to oilfield drilling activity. Facility Infrastructure revenue increased
moderately due to increased work scope on the Long Lake Project, offsetting
delays in work on new projects as a result of slower than expected receipt of
the project specifications required to commence module construction. Canadian
Production Services activity declined slightly and was offset by increases in
United States Operations. The Company's United States manufacturing
subsidiary, J.W. Williams, which is included in the Tubular Management and
Manufacturing operating segment continued to have increased quarterly revenue
from the prior year, with third quarter 2007 having a 28.32% increase.
    Consolidated gross margin in the third quarter of 2007 was 19.9% compared
to 18.1% in 2006. The margin increase is primarily due to improved results in
the Production Services operating segment, in part due to goods and service
tax ("GST") recoveries, covering a two year period, and from good weather and
execution in the field in the United States operations. The Oilfield
Transportation operating segment, had margins well below expectation, due to
poor equipment utilization as a result of a decline in drilling activity in
Canada. This significant under-utilization of transportation equipment
compared to business plan during the quarter impacted the Company's overall
margin by 2.0%.
    Revenue in Flint's Plant Maintenance and Asset Management operating
segment is derived from a 50% owned subsidiary, Flint Transfield Services Ltd.
("FT Services"). In March, the Company announced that FT Services signed a
$1 billion, five year contract with Suncor Energy Inc ("Suncor"). The revenue
of $7.1 million in the quarter is the result of the initial start up of work
on this contract. The revenue from this operating segment will grow
substantially in the fourth quarter and into 2008. FT Services is currently
involved in the transition phase with Suncor, which will continue into 2008 as
additional facilities and locations are added to the scope of work.
    Bill Lingard, President and CEO, said "in the third quarter, the majority
of our operations performed very well and results were on target. Our US
operations continued to perform better than expected mainly due to strong
conventional drilling activity in the US market. However, we continued to see
a decline in rig utilization rates in Canada, which negatively impacted our
Oilfield Transportation Division. Our customers continue to send mixed signals
on their spending plans, and rig activity is still weak as we enter the fourth
quarter. Flint's Infrastructure Services Division has $1 billion in oil sands
construction backlog to complete, and our Asset Management and Maintenance
Division is now deployed at Suncor's oil sands operations. This division will
continue to expand in scope in the fourth quarter and into 2008. Because of
our leverage in oil sands and in drilling activity in the US, our operating
segments in these markets provide us with confidence in our business strategy
going into 2008".

    
    Summary of Consolidated Financial Results

    (in millions of Canadian       Three months ended     Nine months ended
    dollars, except share data)        September 30          September 30
    -------------------------------------------------------------------------
                                       2007       2006       2007       2006
                                   ------------------------------------------

    Revenue                        $  424.3   $  341.5  $ 1,348.8   $1,029.0
    EBITDA(1)                          45.6       32.8      140.8      119.7
    Net earnings                       12.2       12.9       40.7       37.7
      per common share - basic         0.26       0.34       0.86       1.04
      per common share - diluted       0.25       0.33       0.85       1.02
    Funds provided by operations
     before changes in non-cash
     working capital(2)                33.5       23.6       88.0       60.6
    -------------------------------------------------------------------------

                                                        September   December
                                                               30         31
                                                             2007       2006
    -------------------------------------------------------------------------

    Working capital                                      $  343.8   $  301.1
    Total assets                                          1,484.4    1,471.3
    Shareholders' equity                                    813.5      777.2
    -------------------------------------------------------------------------

    (1)  In addition to providing earnings measures in accordance with GAAP,
         the Company presents EBITDA as a supplemental earnings measure as it
         is used by the chief operating decision makers of the Company to
         measure operating segment profitability. EBITDA is equal to earnings
         before interest, taxes, depreciation, amortization and stock based
         compensation. Management uses EBITDA to establish performance
         benchmarks for incentive compensation for employees, to evaluate the
         performance of its operating segments, and in valuing existing
         operations to determine potential goodwill impairment. EBITDA is a
         non-GAAP financial measure that does not have any standardized
         meaning prescribed by GAAP, and may not be comparable to similar
         measures presented by other issuers.

    (2)  The Company presents "funds provided by operations before changes in
         non-cash working capital" as it is used to measure funds generated
         from operations. Funds provided by operations before changes in
         non-cash working capital is equal to net earnings adjusted for
         items not affecting cash. Funds provided by operations before
         changes in non-cash working capital is a non-GAAP financial measure
         that does not have any standardized meaning prescribed by GAAP, and
         may not be comparable to similar measures presented by other
         issuers.



    Selected Segmented Information

    (in millions of Canadian                     Three months ended
    dollars)                                        September 30
    -------------------------------------------------------------------------
                                             2007                  2006
                                   ------------------------------------------
    Revenue by operating segment
      Production Services          $  233.2        55%   $  223.7        66%
      Facility Infrastructure         102.2        24%       95.6        28%
      Oilfield Transportation          36.6         9%          -          -
      Tubular Management and
       Manufacturing                   45.2        11%       22.2         6%
      Plant Maintenance and Asset
       Management                       7.1         1%          -          -
    -------------------------------------------------------------------------
     Total                         $  424.3       100%   $  341.5     100.0%
    -------------------------------------------------------------------------

    EBITDA(1) by operating segment
      Production Services          $   27.7        61%   $   22.6        69%
      Facility Infrastructure           9.7        21%        7.2        22%
      Oilfield Transportation          (0.6)       (1%)         -          -
      Tubular Management and
       Manufacturing                    8.3        18%        3.0         9%
      Plant Maintenance and Asset
       Management                       0.5         1%          -          -
    -------------------------------------------------------------------------
      Total                        $   45.6       100%   $   32.8     100.0%
    -------------------------------------------------------------------------

    (in millions of Canadian	                  Nine months ended
    dollars)                                        September 30
    -------------------------------------------------------------------------
                                             2007                  2006
                                   ------------------------------------------
     Revenue by operating segment
       Production Services         $  763.5        57%   $  658.7        64%
       Facility Infrastructure        303.1        22%      305.9        30%
       Oilfield Transportation        123.5         9%          -          -
       Tubular Management and
        Manufacturing                 148.3        11%       64.4         6%
       Plant Maintenance and Asset
        Management                     10.4         1%          -          -
    -------------------------------------------------------------------------
       Total                       $ 1348.8       100%   $ 1029.0     100.0%
    -------------------------------------------------------------------------

    EBITDA(1) by operating segment
      Production Services          $   81.7        58%   $   79.4        66%
      Facility Infrastructure          25.9        18%       30.6        26%
      Oilfield Transportation           6.3         4%          -          -
      Tubular Management and
       Manufacturing                   26.6        19%        9.7         8%
      Plant Maintenance and Asset
       Management                       0.3         1%          -          -
    -------------------------------------------------------------------------
      Total                        $  140.8       100%   $  119.7     100.0%
    -------------------------------------------------------------------------

    (1)  The Company presents EBITDA as a supplemental earnings measure as it
         is used by the chief operating decision makers of the Company to
         measure operating segment profitability. EBITDA is equal to earnings
         before interest, taxes, depreciation, amortization and stock based
         compensation. Management uses EBITDA to establish performance
         benchmarks for incentive compensation for employees, to evaluate the
         performance of its operating segments, and in valuing existing
         operations to determine potential goodwill impairment. EBITDA is a
         non-GAAP financial measure that does not have any standardized
         meaning prescribed by GAAP, and may not be comparable to similar
         measures presented by other issuers.
    

    For copies of the company's MD&A and Interim Financial Report for the
quarter and year to date ending September 30, 2007 please go to www.SEDAR.com;
or visit our company website at
http://www.flintenergy.com/ir/financial_reports.html

    ADVISORY REGARDING FORWARD LOOKING STATEMENTS

    This press release contains forward-looking statements under the heading
"Outlook" and elsewhere concerning future events or the Company's future
performance, including the Company's projected operating results for 2007 and
beyond, and anticipated capital expenditure trends and drilling activity in
the oil and gas industry. Forward-looking statements are often, but not
always, identified by the use of words such as "seek", "anticipate", "plan",
"continue", "estimate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should", "believe" and
similar expressions. Actual events or results may differ materially from those
reflected in the Company's forward-looking statements due to a number of known
and unknown risks, uncertainties and other factors affecting the Company's
business and the oil and gas industry generally. These factors, include, but
are not limited to, fluctuations in oil and gas prices, fluctuations in the
level of oil and gas industry capital expenditures and expenditures on
production and remedial work and other factors that affect demand for the
Company's services, industry competition, the need to effectively integrate
acquired businesses, uncertainties as to the Company's ability to implement
its business strategy effectively in Canada and the United States, political
and economic conditions, the Company's ability to attract and retain key
personnel, and other risks and uncertainties described under the heading "Risk
Factors" and elsewhere in the Company's Annual Information Form for the year
ended December 31, 2006 and other documents filed with Canadian provincial
securities authorities. These documents are available to the public at
www.sedar.com. The Company believes that the expectations reflected in these
forward-looking statements are reasonable, but no assurance can be given that
these expectations will prove to be correct and such forward-looking
statements included in this report should not be unduly relied upon. These
statements speak only as of the date of this report. The Company does not
undertake to update any forward-looking statement, whether written, or oral
that may be made from time to time by the Company or on the Company's behalf,
except as may be required under applicable securities laws. The
forward- looking statements contained in this press release are expressly
qualified by this statement. Unless otherwise indicated, all financial
information in this press release is presented in Canadian dollars and in
accordance with the Canadian Generally Accepted Accounting Principles
("GAAP").





For further information:

For further information: Guy Cocquyt, Director, Investor Relations:
(403) 218-7195 or gcocquyt@flintenergy.com

Organization Profile

FLINT ENERGY SERVICES LTD.

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