Flint Energy Services Ltd. announces Q4 2006 results



    (TSX: FES)

    CALGARY, March 14 /CNW/ -

    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 and 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 Canadian
generally accepted accounting principles.
    The following management's Discussion and Analysis ("MD&A") should be
read in conjunction with the Company's audited Consolidated Financial
Statements and MD&A for the year ended December 31, 2005.
    The following financial information has been prepared by management and
has not been reviewed by the Company's auditors.

    Flint Energy Services Ltd. ("Flint" or the "Company") today announced its
unaudited financial results for the fourth quarter of 2006. Net earnings for
the quarter ended December 31, 2006 were $16.9 million on revenue of
$426.6 million compared to net earnings of $11.6 million on revenue of
$292.8 million for the comparative quarter in 2005. Funds provided by
operations before changes in non-cash working capital for the three-month
period were $33.4 million compared to $21.1 million for the comparative period
in 2005. Diluted earnings per share for the fourth quarter of 2006 increased
to $0.39 from $0.34 for the comparative quarter in 2005.
    Flint's net earnings for the year ended December 31, 2006 were
$54.6 million ($1.41 per common share - diluted) compared to $45.7 million
($1.35 per common share - diluted) in 2005. The increase in net earnings
resulted from a 41.2% increase in revenue to $1,455.7 million from $1,031.1
million in 2005, while gross margins were maintained at levels similar to
2005. The 2006 financial results were negatively impacted by the passing into
law of Bill 15 by the Quebec National Assembly, which included retroactive
changes to the Quebec Taxation Act that created taxable income in Quebec for
Flint for the 2002 to 2005 taxation years. The impact on tax expense was $15.5
million and on interest expense was $4.2 million. If not for the impact of the
Quebec retroactive tax legislation, diluted earnings per share would have been
$1.91 or $0.50 higher.
    On December 1, 2006 the Company purchased all of the shares of Transco
Energy Services Ltd. ("Transco"), an oilfield transportation and logistics and
tubular management company with operations in British Columbia, Alberta,
Saskatchewan and the Northwest Territories. This acquisition is the largest
undertaken by the Company in its history with a total purchase price of
$347.8 million and with most recent annual revenues in excess of $350 million.
The acquisition expands Flint's services to existing customers and provides
synergies across the combined operations. The operating results of Transco
have been consolidated into Flint's financial statements for the one-month
period following the closing of the acquisition.
    On July 4, 2006 the Company acquired Denmar Energy Services Ltd.
("Denmar") a privately owned company with operations based in Bonnyville,
Alberta. The purchase price of Denmar was $23.2 million and the company had
most recent annual revenues in excess of $50 million dollars. Denmar provided
services similar to Flint's Production Services operating segment. The Denmar
acquisition strengthened Flint's regional presence in an important heavy oil
producing area. The operating results of Denmar have been consolidated into
Flint's financial statements following the closing of the acquisition.
    The Company also announced on September 28, 2006 that it had formed an
operations and maintenance company, Flint Transfield Services Limited. ("FT
Services"), with Transfield Services Limited ("Transfield") of Australia. FT
Services is a joint venture owned 50% by Flint and 50% by Transfield. FT
Services announced in early 2007 the commencement of exclusive negotiations
with a major oil sands producer for a contract with revenues worth in excess
of $1 billion over a 5-year contract period. FT Services did not have any
revenues or expenses requiring proportionate consolidation in Flint's
financial statements for the fiscal year ended December 31, 2006. Included in
general and administrative expenses for the quarter are $1.3 million
representing Flint's share of start up costs related to FT Services, which
were directly incurred by Flint.
    On October 11, 2006, the Company announced a two-for-one stock split of
the outstanding common shares of the Company. The common shares began trading
on a split basis on the Toronto Stock Exchange on December 13, 2006, being the
second trading day preceding the record date of December 15, 2006. The numbers
of authorized but unissued shares of the Company's common stock were not
changed as a result of the stock split. Unless otherwise stated, all
references to share and per share amounts in the consolidated financial
information have been retroactively restated to give effect to this share
split.

    
    Consolidated Financial Results

    Summary of Consolidated Financial Results

    (in millions of Canadian        Three months ended         Year ended
     dollars, except share data)         December 31           December 31
    -------------------------------------------------------------------------
                                       2006       2005       2006       2005
                                  -------------------------------------------

    Revenue                       $   426.6  $   292.8  $ 1,455.7  $ 1,031.1
    EBITDA(1)                          42.7       30.4      162.4      114.9
    Net earnings                       16.9       11.6       54.6       45.7
      per common share - basic         0.39       0.34       1.44       1.37
      per common share - diluted       0.39       0.34       1.41       1.35
    Funds provided by operations
     before changes in non-cash
     working capital                   33.4       21.1       94.0       78.2


                                                            Three     Twelve
                                                           months     months
                                                        ---------------------
                                                     Ended December 31, 2006
    -------------------------------------------------------------------------

    Net earnings excluding Quebec retroactive income
     tax assessments                                    $    17.3  $    74.3
    Per common share - diluted - excluding Quebec
     retroactive income tax assessments                      0.39       1.91
    Funds provided by operations before changes in
     non-cash working capital - excluding Quebec
     retroactive income tax assessments                      33.8      113.7


                                                         December   December
                                                          31 2006    31 2005
    -------------------------------------------------------------------------

    Working capital                                     $   316.3  $   212.7
    Total assets                                          1,471.3      734.5
    Shareholders' equity                                    777.2      354.7
    -------------------------------------------------------------------------
    (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.
    

    Consolidated Fourth Quarter Financial Results

    Net earnings for the quarter ended December 31, 2006 were $16.9 million
on revenue of $426.6 million compared to net earnings of $11.6 million on
revenue of $292.8 million for the comparative quarter in 2005. Funds provided
by operations before changes in non-cash working capital for the three-month
period were $33.4 million compared to $21.1 million for the comparative period
in 2005. Diluted earnings per share for the fourth quarter of 2006 increased
to $0.39 from $0.34 for the comparative quarter in 2005.
    The primary reason for the quarter's higher net earnings is a
$133.8 million or 45.7% fourth quarter year-over-year increase in revenue. The
acquisition of Transco on December 1, 2006 added $25.0 million in revenue for
the quarter. The majority of the remaining fourth quarter year-over-year
increase in revenue is due to an increase in demand for the Company's
Production Services operating segment in both Canada and the United States.
The Facility Infrastructure operating segment also experienced an increase due
to the continued execution of projects secured in prior periods.
    Fourth quarter consolidated gross margin of 19.5% is higher than the
prior year's fourth quarter gross margin of 19.3%, primarily due to the
Company's Facility Infrastructure operating segment obtaining client approval
in the fourth quarter of 2006 of previously performed out of scope work. The
formal client approval of this work is required under GAAP prior to the
recording of the additional margin attributed to this work. Also contributing
to the increase in margin percentage was the addition of one month's revenues
from Transco whose service lines on average have higher overall margins than
the Company's other operating segments. The increase in margin percentage was
offset by a decline in the Canadian portion of the Production Services
operating segment. The Canadian Production Services division experienced poor
operating results in Southern Alberta due to project execution issues on a
limited number of projects and low utilization of equipment.
    The combination of overall fourth quarter margins and higher revenue
resulted in gross profit of $83.3 million, $26.8 million or 47.4% higher than
gross profit of $56.5 million in the fourth quarter of 2005.
    Amortization of the fair market bump on assets and intangibles acquired
through the purchase of Transco on December 1, 2006 reduced net earnings by
$1.0 million in the quarter.

    Outlook

    Both the addition of the Transco operations on December 1, 2006 and a
full year effect of the Denmar acquisition made on July 4, 2006 will
contribute to expected higher year-over-year revenue in 2007. Management will
be focused in 2007 on integrating the Transco operations and taking advantage
of the ability to incorporate the additional services that Transco offers into
Flint's existing alliance relationships with customers and capitalizing on
facility and operational synergies. While forecasts call for some pull back in
Canadian drilling, the Company's objective will be to improve equipment and
personnel utilization and maximize the integration of new business lines to
maintain operating margins. The newly acquired Oilfield Transportation
operating segment is expected to see increases in revenue in some regions due
to specific regional drilling programs for which the Company is strategically
positioned to compete. In addition revenue from the heavy haul division within
this operating segment is driven by large construction projects and equipment
moves rather than by drilling activities.
    Although the Company projects a stabilization of revenue growth from the
Production Services operating segment in 2007, risks to achieving continued
growth are higher than in the last several years due to a less robust
commodity market. Flint is in the fortunate position of having many alliance
type arrangements with major energy producers that have longer-term
development projects that continue through a commodity price cycle. Many
analysts anticipate a return to a strong energy market in 2008 as they predict
that the supply dynamics will return to a balanced position quickly due to the
depletion rate inherent in natural gas wells. The Company's United States
Production Services activities are expected to continue to grow based on
customer demand in key strategic basins in which the Company participates.
    While Flint has successfully built up a backlog of work in its oil sands
construction business, it is likely that revenues in 2007 will be reduced in
some quarters due to a shortage of customer internal and contracted
engineering capabilities and the resulting delays in project startups. Flint
anticipates commencing module fabrication on the previously announced Shell
Albian Sands and the Suncor Firebag III projects in the latter part of the
second quarter and first part of the third quarter of 2007 respectively. To
date Flint has been involved in the planning and estimating on both projects
on a cost plus reimbursement basis. Flint continues to be involved in the
estimating and planning of other large oil sands operation, refining and
upgrading projects which may have some positive impact on the Company's
revenue in 2007, but more significant impact from these projects is expected
in subsequent years.
    Should the recently announced negotiations between a major oil sands
producer and the Company's 50% owned subsidiary, FT Services, be successful,
the Company will have a base to build an exciting new asset management service
operating segment. Many additional opportunities to bid on similar asset
management service contacts for oil sands and refining facilities are
available for FT Services.
    With the additions of Denmar and Transco and the early initial success of
FT Services, the Company's growth should continue. The Company is confident it
has positioned itself effectively to take advantage of spending trends in
heavy oil development and natural gas exploration across North America.



    
    CONSOLIDATED BALANCE SHEETS

    (in thousands of Canadian dollars)
    As at                                           December 31, December 31,
                                                           2006         2005
    -------------------------------------------------------------------------
                                                     (unaudited)

    ASSETS

    Current assets:
      Cash and cash equivalents                     $    11,520  $    10,474
      Accounts receivable                               291,230      205,305
      Revenue in excess of billings                     205,220      104,391
      Inventories                                        38,483       21,653
      Prepaids and other current assets                  20,106        8,577
      Future income tax assets                            4,870        2,464
      Income taxes receivable                             2,246          244
    -------------------------------------------------------------------------
                                                        573,675      353,108

    Property, plant and equipment                       428,359      180,021
    Goodwill                                            406,563      198,176
    Intangible assets and deferred charges               59,323        1,749
    Other long-term assets                                2,938          584
    Future income tax assets                                427          818
    -------------------------------------------------------------------------
                                                    $ 1,471,285      734,456
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
      Accounts payable and accrued liabilities      $   187,768  $   114,985
      Billings in excess of revenue                       9,690        3,134
      Income taxes payable                               36,724       10,986
      Future income tax liabilities                      11,233        5,893
      Current portion of long-term debt                  11,997        5,408
    -------------------------------------------------------------------------
                                                        257,412      140,406

    Long-term debt                                      367,112      211,471
    Future income tax liabilities                        68,781       27,875
    Other long-term liabilities                             800            -
    -------------------------------------------------------------------------
                                                        436,693      239,346
    Shareholders' equity:
      Capital stock                                     569,096      203,250
      Contributed surplus                                 6,475        5,478
      Retained earnings                                 214,695      160,062
      Cumulative translation account                    (13,086)     (14,086)
    -------------------------------------------------------------------------
                                                        777,180      354,704
    -------------------------------------------------------------------------

                                                    $ 1,471,285  $   734,456
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

                                Three        Three
                               months       months         Year         Year
    (in thousands of            ended        ended        ended        ended
     Canadian dollars,       December     December     December     December
     except share data)      31, 2006     31, 2005     31, 2006     31, 2005
    -------------------------------------------------------------------------
                           (unaudited)  (unaudited)  (unaudited)

    Revenue               $   426,644  $   292,798  $ 1,455,661  $ 1,031,145
    Direct costs              343,312      236,258    1,168,156      829,207
    -------------------------------------------------------------------------
    Gross profit               83,332       56,540      287,505      201,938

    General and
     administrative
     expenses                  40,611       26,110      125,119       87,049
    Amortization on
     property, plant
     and equipment             11,408        7,285       33,898       27,595
    Amortization on
     intangible assets and
     other deferred charges     1,280          131        2,383          638
    Stock based
     compensation expense         921        1,513        3,562        2,801
    -------------------------------------------------------------------------
                               29,112       21,501      122,543       83,855

    Interest on long-term
     debt                       4,742        3,798       18,055       15,150
    Interest income              (761)           -       (1,848)           -
    -------------------------------------------------------------------------
    Earnings before income
     taxes                     25,131       17,703      106,336       68,705
    -------------------------------------------------------------------------

    Income taxes:
      Current                   5,482        5,458       51,992       21,639
      Future (recovery)         2,749          628         (289)       1,322
    -------------------------------------------------------------------------
                                8,231        6,086       51,703       22,961

    Net earnings               16,900       11,617       54,633       45,744

    Retained earnings,
     beginning of period      197,795      148,445      160,062      114,318
    -------------------------------------------------------------------------
    Retained earnings,
     end of period        $   214,695  $   160,062  $   214,695  $   160,062
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share:
      Basic               $      0.39  $      0.34  $      1.44  $      1.37
      Diluted             $      0.39  $      0.34  $      1.41  $      1.35
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average
     common shares:
      Basic                42,884,629   33,690,718   37,957,819   33,453,526
      Diluted              43,661,413   34,312,010   38,811,383   33,864,778
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                Three        Three
                               months       months         Year         Year
                                ended        ended        ended        ended
    (in thousands of         December     December     December     December
     Canadian dollars,       31, 2006     31, 2005     31, 2006     31, 2005
    -------------------------------------------------------------------------
                           (unaudited)  (unaudited)  (unaudited)

    Cash provided by
     (used in):

    Operating activities:
      Net earnings          $  16,900    $  11,617    $  54,633    $  45,744
      Items not affecting
       cash:
        Amortization on
         property, plant
         and equipment         11,408        7,285       33,898       27,595
        Amortization on
         intangible assets
         and other deferred
         charges                1,280          131        2,383          638
        Amortization on
         deferred finance
         charges                  335           65          335          261
        Gain on disposal
         of property, plant
         and equipment           (161)        (182)        (496)        (124)
        Stock based
         compensation
         expense                  921        1,513        3,562        2,801
        Future income taxes     2,749          628         (289)       1,322
    -------------------------------------------------------------------------
      Funds provided by
       operations before
       changes in non-cash
       working capital         33,432       21,057       94,026       78,237

      Changes in non-cash
       balances relating
       to operations          (64,671)      14,328      (69,841)     (32,872)
    -------------------------------------------------------------------------
                              (31,239)      35,385       24,185       45,365
    -------------------------------------------------------------------------

    Investing activities:
      Acquisition of
       subsidiary, net of
       cash acquired         (225,216)      (5,530)    (240,653)      (5,530)
      Advance to
       subsidiary prior
       to acquisition        (108,586)           -     (118,580)           -
      Purchase of property,
       plant and equipment    (30,309)     (15,316)     (60,349)     (37,612)
      Proceeds from
       disposal of property,
       plant and equipment      3,489        2,202        7,387        6,249
    -------------------------------------------------------------------------
                             (360,622)     (18,644)    (412,195)     (36,893)
    -------------------------------------------------------------------------

    Financing activities:
      Proceeds from
       long-term debt         297,453       14,906      399,737       71,083
      Repayments of
       long-term debt         (85,463)     (22,559)    (258,137)     (77,981)
      Deferred financing
       costs                   (1,351)          (6)      (1,351)         (65)
      Proceeds from issue
       of capital stock on
       exercise of options        123        1,096        6,657        5,742
      Proceeds from primary
       share offering         137,662            -      253,662            -
      Issue costs related
       to primary share
       offering                (6,430)           -      (11,512)           -
    -------------------------------------------------------------------------
                              341,994       (6,563)     389,056       (1,221)
    -------------------------------------------------------------------------

    Increase (decrease)
     in cash and cash
     equivalents              (49,867)      10,178        1,046        7,251
    Cash and cash
     equivalents,
     beginning
     of period                 61,387          296       10,474        3,223
    -------------------------------------------------------------------------

    Cash and cash
     equivalents,
     end of period          $  11,520    $  10,474    $  11,520    $  10,474
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash
     flow information:
      Cash (paid) received
       during the period:
        Interest paid       $  (3,251)   $  (3,725)   $ (12,409)   $ (14,877)
        Interest received         937            -        1,831            -
        Income taxes        $  (8,430)   $  (1,951)   $ (37,199)   $  (4,045)



    SEGMENTED INFORMATION

                                  Production      Facility        Oilfield
                                   Services    Infrastructure  Transportation
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Three months ended
     December 31, 2006

    Revenue                       $  254,649      $  120,882      $   17,391
    EBITDA(1)                         18,046          13,477           3,771
    Amortization                       7,192           1,828           2,498
    Capital expenditures              17,877           5,226           2,448
    Additions to goodwill                801               -         158,151
    Goodwill                         173,190          28,900         158,151

    Total assets                  $  902,910      $  360,182      $  123,573
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Three months ended
     December 31, 2005

    Revenue                       $  190,856      $   81,264      $        -
    EBITDA(1)                         21,473           6,592               -
    Amortization                       5,230           1,641               -
    Capital expenditures              12,687           1,739               -
    Additions to goodwill                626               -               -
    Goodwill                         160,017          28,900               -

    Total assets                  $  485,900      $  200,318      $        -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                    Tubular
                                Management and
                                 Manufacturing       Total
    ---------------------------------------------------------

    ---------------------------------------------------------
    Three months ended
     December 31, 2006

    Revenue                       $   33,722      $  426,644
    EBITDA(1)                          7,427          42,721
    Amortization                       1,170          12,688
    Capital expenditures               4,758          30,309
    Additions to goodwill             37,062         196,014
    Goodwill                          46,322         406,563

    Total assets                  $   84,620      $1,471,285
    ---------------------------------------------------------
    ---------------------------------------------------------

    Three months ended
     December 31, 2005

    Revenue                       $   20,678      $  292,798
    EBITDA(1)                          2,365          30,430
    Amortization                         545           7,416
    Capital expenditures                 890          15,316
    Additions to goodwill                  -             626
    Goodwill                           9,259         198,176

    Total assets                  $   48,238      $  734,456
    ---------------------------------------------------------
    ---------------------------------------------------------


                                  Production      Facility        Oilfield
                                   Services    Infrastructure  Transportation
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Year ended
     December 31, 2006

    Revenue                       $  913,642      $  426,599      $   17,391
    EBITDA(1)                         97,626          43,976           3,771
    Amortization                      23,667           7,389           2,481
    Capital expenditures              41,254          10,464           2,448
    Additions to goodwill             13,173               -         158,151
    Goodwill                         173,190          28,900         158,151

    Total assets                  $  902,910      $  360,182      $  123,573
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Year ended
     December 31, 2005

    Revenue                       $  658,839      $  290,925      $        -
    EBITDA(1)                         80,864          25,907               -
    Amortization                      19,125           8,083               -
    Capital expenditures              28,946           7,607               -
    Additions to goodwill                626               -               -
    Goodwill                         160,017          28,900               -

    Total assets                  $  485,900      $  200,318      $        -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                    Tubular
                                Management and
                                 Manufacturing       Total
    ---------------------------------------------------------

    ---------------------------------------------------------
    Year ended
     December 31, 2006

    Revenue                       $   98,029      $1,455,661
    EBITDA(1)                         17,013         162,386
    Amortization                       2,744          36,281
    Capital expenditures               6,183          60,349
    Additions to goodwill             37,062         208,386
    Goodwill                          46,322         406,563

    Total assets                  $   84,620      $1,471,285
    ---------------------------------------------------------
    ---------------------------------------------------------

    Year ended
     December 31, 2005

    Revenue                       $   81,381      $1,031,145
    EBITDA(1)                          8,118         114,889
    Amortization                       1,025          28,233
    Capital expenditures               1,059          37,612
    Additions to goodwill                  -             626
    Goodwill                           9,259         198,176

    Total assets                  $   48,238      $  734,456
    ---------------------------------------------------------
    ---------------------------------------------------------



                                      Canada   United States           Total
    -------------------------------------------------------------------------

    Three months ended
     December 31, 2006
    Revenue                       $  322,673      $  103,971      $  426,644
    Property, plant and equipment    381,655          46,704         428,359
    Goodwill                         379,500          27,063         406,563
    Total assets                  $1,286,654      $  184,631      $1,471,285
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Three months ended
     December 31, 2005
    Revenue                       $  218,308      $   74,490      $  292,798
    Property, plant and equipment    146,502          33,519         180,021
    Goodwill                         172,025          26,151         198,176
    Total assets                  $  596,726      $  137,730      $  734,456
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                      Canada   United States           Total
    -------------------------------------------------------------------------

    Year ended
     December 31, 2006
    Revenue                       $1,089,256      $  366,405      $1,455,661
    Property, plant and equipment    381,655          46,704         428,359
    Goodwill                         379,500          27,063         406,563
    Total assets                  $1,286,654      $  184,631      $1,471,285
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Year ended
     December 31, 2005
    Revenue                       $  760,313      $  270,832      $1,031,145
    Property, plant and equipment    146,502          33,519         180,021
    Goodwill                         172,025          26,151         198,176
    Total assets                  $  596,726      $  137,730      $  734,456
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) In addition to providing earnings measures in accordance with GAAP,
        the Company presents EBITDA and earnings from operations as
        supplemental earnings measures as they are 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. Earnings from operations is equal to
        gross profit minus general and administrative, stock based
        compensation and amortization expenses. EBITDA and earnings from
        operations are non-GAAP financial measures that do not have any
        standardized meaning prescribed by GAAP, and may not be comparable to
        similar measures presented by other issuers.
    

    BASIS OF PRESENTATION

    The preceding fourth quarter interim consolidated financial information
is expressed in Canadian dollars. It does not include all the disclosures as
required for annual or quarterly financial statements under generally accepted
accounting principles. The fourth quarter interim consolidated financial
information includes the accounts of Flint Energy Services Ltd. and all
subsidiary companies. All subsidiary companies are wholly owned and all
material intercompany accounts and transactions have been eliminated. The
Company proportionately consolidates its interests in joint ventures. The
fourth quarter interim consolidated financial information should be read in
conjunction with the December 31, 2005 annual report.
    The preparation of the fourth quarter interim consolidated financial
information requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses and
disclosures of contingent assets and liabilities. Actual results may differ
from those estimates and assumptions.
    Certain comparative financial information has been reclassified to
conform to current period presentation.





For further information:

For further information: Guy Cocquyt, Director, Investor Relations and
Market Research, gcocquyt@flintenergy.com, tel (403) 218-7195, fax (403)
215-5445; or T.D. (Terry) Freeman, Chief Financial Officer,
tfreeman@flintenergy.com, tel (403) 218-7100, fax (403) 215-5481

Organization Profile

FLINT ENERGY SERVICES LTD.

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