Flint Energy Services Ltd. announces second quarter earnings



    (TSX: FES)

    CALGARY, Aug. 6 /CNW/ - Flint Energy Services Ltd. ("Flint" or the
"Company") reported today that revenue for the three months ended June 30,
2009 was $424.2 million, down $107.5 million compared to $531.7 million for
the same period in 2008. Decreases in revenue in the Production Services and
Oilfield Services operating segments were a result of reduced natural gas
drilling activity in both Canada and the United States. Revenue from the
Maintenance Services segment was down year over year due to the large
turnaround performed last year for Suncor, not repeated during the second
quarter of 2009. The Facility Infrastructure division reported $131.3 million
in revenue, up $10.9 million over the same period last year as a result of
increased work on the Shell Albian Sands project and work on the StatoilHydro
project at Leismer, Alberta. Revenues from the United States were 18.3 percent
of Company revenue for the quarter, down $55.1 million from last year as a
result of lower United States activity levels and proportionately more
revenues from Canadian operating segments.
    For the first six months of 2009, the Company reported revenues of $954.4
million, down 8.9 percent compared to $1,047.3 million in the first six months
of 2008. The largest reduction in revenue was reported in the Production
Services segment with $441.6 million of revenue, down $107.2 million or 19.5
percent compared to $548.8 million in the first six months of 2008. Facility
Infrastructure revenues for the first 6 months were $274.6 million, up $53.1
million over the first six months of 2008.
    Net earnings for the quarter were $3.8 million or $0.08 per fully diluted
common share, compared to net earnings of $11.8 million or $0.25 per fully
diluted common share in the second quarter of 2008. The second quarter of 2008
included $0.18 in fully diluted earnings per share as a result of the Quebec
tax settlement in 2008. For the first six months of 2009 net earnings were
$22.3 million or $0.48 per fully diluted share, compared to $30.3 million or
$0.63 per fully diluted share in the first six months of 2008.
    Gross profit for the quarter was $55.1 million (13.0 percent) compared to
$71.9 million (13.5 percent) in the comparative quarter of last year. The
decrease in the gross margin percentages was attributed to a decline in
overall activity together with fixed operating costs spread over reduced
quarterly revenues. Gross profit for the first six months of 2009 was $143.8
million (15.1 percent), down from $163.7 million (15.6 percent) in the first
half of 2008.
    General and administrative expenses for the three months ended June 30,
2009 were $31.9 million or 7.5 percent of revenue, down $8.9 million compared
to $40.8 million or 7.7 percent of revenue in the second quarter of 2008.
Reductions in personnel and salary expenses were offset by additional costs in
information technology in the quarter for the roll out of the Company's
Enterprise Resource Planning (ERP) system, JD Edwards, in the Oilfield
Services, Tubular Management and United States operations. General and
administrative expenses for the first six months of 2009 were $74.2 million,
down $4.7 million from last year, representing 7.8 percent of revenues
compared to 7.5 percent of revenues in the first six months of 2008.
    EBITDA was $23.5 million (5.5 percent) for the quarter ended June 30,
2009. EBITDA was down $7.6 million compared to $31.1 million (5.8 percent) in
the comparative quarter last year as a result of reduced gross margin and
lower quarterly revenues. EBITDA for the first 6 months of 2009 was $70.3
million (7.4 percent) compared to EBITDA of $84.8 million (8.1 percent) for
the first six months of 2008.
    Cash flows from operations before changes in non-cash items for the
quarter ending June 30, 2009 were $15.0 million, compared to $32.2 million in
the second quarter last year. For the first six months of 2009, cash flows
were $38.8 million compared to $62.2 million in the first six months of 2008.
    During the quarter, Flint further reduced its operating credit balance by
$52.9 million and completed the renegotiation of its revolving credit
agreement for a new three year term.
    Bill Lingard, President and Chief Executive Officer of the Company said,
"the 50 percent drop in drilling activity in both Canada and the United States
impacted both our Production Services and Oilfield Services segments in the
second quarter. In spite of these challenging market conditions, Flint was
able to remain profitable, conserve capital and reduce debt during the
quarter."
    Mr. Lingard further stated, "the company is well positioned to weather
continuing weak market conditions in the second half of the year. The recent
announcement of the approval of the Kearl Lake oil sands project by Imperial
Oil's Board has provided optimism for the unconventional oil sector, and
recent reductions in both labour and material costs for these projects should
encourage further capital investment announcements. We are also optimistic
that with oil holding above $60 per barrel, some of the deferred projects will
move forward in the coming months."
    Selected financial information for the new business segments are as
follows:

    
    -------------------------------------------------------------------------
    (in thousands
     of                         Facility                   Main-
     Canadian     Production      Infra-    Oilfield     tenance
     dollars)       Services   structure    Services    Services       Total
    -------------------------------------------------------------------------
    Three months
     ended June 30,
     2009
    Revenue       $  186,600  $  131,270  $   40,244  $   66,124  $  424,238
    EBITDA             5,063      14,217        (133)      4,357      23,504
    EBITDA %            2.7%       10.8%       (0.3%)       6.6%        5.5%
    Amortization on
     property,
     plant and
     equipment,
     and intangible
     assets            5,875       2,121       4,915       1,290      14,201
    Capital
     expenditures      4,196       2,766       2,504       2,064      11,530
    -------------------------------------------------------------------------

    Three months
     ended June 30,
     2008
     (restated)
    Revenue       $  258,950  $  120,438  $   50,882  $  101,443  $  531,713
    EBITDA            18,175      10,339      (4,525)      7,109      31,098
    EBITDA %            7.0%        8.6%       (8.9%)       7.0%        5.8%
    Amortization on
     property,
     plant and
     equipment,
     and intangible
     assets            8,152       2,794       5,586         279      16,811
    Capital
     expenditures      4,622       1,519       1,465       1,592       9,198
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (in thousands
     of                         Facility                   Main-
     Canadian     Production      Infra-    Oilfield     tenance
     dollars)       Services   structure    Services    Services       Total
    -------------------------------------------------------------------------
    Six months
     ended June 30,
     2009
    Revenue       $  441,560  $  274,580  $  110,483  $  127,765  $  954,388
    EBITDA            24,612      26,973       8,467      10,264      70,316
    EBITDA %            5.6%        9.8%        7.7%        8.0%        7.4%
    Amortization on
     property,
     plant and
     equipment, and
     intangible
     assets           12,203       4,050      10,045       2,358      28,656
    Capital
     expenditures      5,755       3,460       3,582       2,771      15,568
    -------------------------------------------------------------------------

    Six months
     ended June 30,
     2008
     (restated)
    Revenue       $  548,780  $  221,489  $  136,998  $  140,030  $1,047,297
    EBITDA            47,388      18,367       9,096       9,926      84,777
    EBITDA %            8.6%        8.3%        6.6%        7.1%        8.1%
    Amortization on
     property,
     plant and
     equipment, and
     intangible
     assets           16,987       5,093      11,947         581      34,608
    Capital
     expenditures      6,079       1,888       4,334       3,364      15,665
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Additional Information

    Complete copies of the Company's Q2 2009 Management Discussion and
Analysis (MD&A), Interim Financial Statements and the Notes to Financial
Statements are available on SEDAR at www.sedar.com. Additional information
related to the Company is available on SEDAR, including a copy of the latest
Annual Information Form. Electronic copies of the company's quarterly and
annual reports and other public filings may also be obtained by visiting
www.flintenergy.com.
    A conference call with Flint management is scheduled for 11:00 AM Eastern
Time on Friday, August 7, 2009. Information on how to participate in the call
or listen to the live or archived playback of the call is available on Flint's
website www.flintenergy.com.

    Flint Energy Services Ltd. is a market leader providing an expanding
range of integrated products and services for the oil and gas industry
including: production services; field construction; oilfield transportation;
process equipment design and manufacturing; and tubular management services.
Flint provides this unique breadth of products and services through over 60
strategic locations in the oil and gas producing areas of western North
America, from Inuvik in the Northwest Territories to Mission, Texas on the
Mexican border. Flint is a preferred provider of infrastructure construction
management, module fabrication, maintenance services for upgrading, and
production facilities in Alberta's oil sands sector.
http://www.flintenergy.com

    FORWARD LOOKING STATEMENTS

    Certain statements in this news release are "forward-looking statements",
which reflect current expectations of the management of Flint regarding future
events or Flint's future performance. All statements other than statements of
historical fact contained in this news release may be forward-looking
statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or events to
differ materially from those anticipated in the forward-looking statements.
Flint believes that the expectations reflected in such forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking statements
should not be unduly relied upon. The forward-looking statements are expressly
qualified in their entirety by this cautionary statement. The forward-looking
statements are made as of the date of this news release and Flint assumes no
obligation to update or revise them to reflect new events or circumstances,
except as expressly required by applicable securities law. Further information
regarding risks and uncertainties relating to Flint and its securities can be
found in the disclosure documents filed by Flint with the securities
regulatory authorities, available at www.sedar.com.

    %SEDAR: 00017156E




For further information:

For further information: Guy Cocquyt, Director of Investor Relations,
Telephone: (403) 218-7195, Fax: (403) 215-5481, Email:
gcocquyt@flint-energy.com

Organization Profile

FLINT ENERGY SERVICES LTD.

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