Forbes Energy Services Reports First Quarter Financial Results



    ALICE, Texas, May 15 /CNW/ -- Forbes Energy Services Ltd. (TSX: FRB)
today announced financial and operating results for the quarter ended March
31, 2009.

    Revenues for the first quarter declined to $63.4 million compared to
$96.7 million in the fourth quarter of 2008 as a result of lower pricing and
utilization in both operating segments.  Net loss for the three months ended
March 31, 2009 was $4.5 million, or a loss of $0.07 per share, compared to a
net loss of $2.3 million, or $0.04 per share, in the quarter ended December
31, 2008.  EBITDA for the first quarter of 2009 totaled $9.0 million versus
$21.2 million in the 2008 fourth quarter.  EBITDA is a non-GAAP financial
measure, defined by the Company as net income before interest, taxes,
depreciation and amortization.  For a reconciliation of EBITDA to net income,
please see the disclosures at the end of this release.

    John Crisp, Forbes Energy's President and Chief Executive Officer,
stated, "As expected, the U.S. operating environment was quite challenging
during the first quarter due to a significant decline in customer spending as
a result of lower energy prices.  We have continued to implement cost cutting
measures, including headcount and salary reductions, in an effort to keep pace
with declining revenues.  Going into the second quarter we continue to
experience utilization and pricing pressures, although indications are that
the rate of decline is slowing, and the market may begin stabilizing later
this year.

    "In contrast to the domestic environment, Mexico is truly a bright spot
for Forbes Energy.  We put our first four rigs to work there in the first
quarter, and we have two more expected to be 'on well' before the end of the
second quarter.  We anticipate that Mexico will be an area of continued growth
for us going forward," concluded Crisp.
    

    Business Segment Results

    Well Servicing
    
    Well servicing revenues decreased to $31.5 million during the first
quarter of 2009 compared to $49.0 million in the fourth quarter of 2008.  Well
servicing segment gross margins in the first quarter of 2009 were $5.1
million, compared to $10.2 million in the fourth quarter of 2008.

    Forbes recorded approximately 73,522 rig hours for the first quarter of
2009, including 4,748 hours in Mexico, compared to 97,588 total hours in the
fourth quarter of 2008.  The Company had 170 rigs in its well service fleet at
March 31, 2009, unchanged from December 31, 2008.  Capital expenditures for
the well servicing segment totaled $6.0 million during the three months ended
March 31, 2009.
    

    Fluid Logistics
    
    Fluid logistics revenues in the first quarter of 2009 decreased to $31.9
million compared to $47.7 million in the fourth quarter of 2008.  Gross
margins for the fluid logistics segment totaled $8.7 million compared to $16.5
million in the previous quarter.

    Forbes recorded 229,219 truck hours during the first quarter of 2009
compared to 309,020 for the fourth quarter of 2008.  The Company's fluid
transport segment heavy truck fleet totaled 370 as of March 31, 2009,
unchanged from December 31, 2008.  Total capital expenditures for the fluid
logistics segment were $1.3 million for the three months ended March 31, 2009.
    

    Form 10-Q
    
    The Company's form 10-Q for the period ended March 31, 2009 has been
filed with the U.S. Securities & Exchange Commission and has received a May
18, 2009 file date.  It also has been filed in Canada and will be available on
SEDAR.
    

    Previously Announced Restatements
    
    The Company also announced that consistent with the previously announced
need to restate its First Quarter 2008 financial statements, it is posting to
its website today a Form 10-Q/A Amendment No. 1 for the quarterly period ended
March 31, 2008.  Neither the original Form 10-Q or the Form 10-Q/A are being
filed with the Securities and Exchange Commission because the report covers a
period that predates the Company's obligations to file under the securities
laws.  It is also anticipated that the amendments to the Forms 10-Q for
quarters ended June 30, 2008 and September 30, 2008 reflecting the previously
announced restatements for such quarters will be filed with the SEC in the
next few days.
    

    Conference Call
    
    Forbes Energy will host a conference call to discuss its first quarter
2009 results on Tuesday, May 19, 2009, at 10:00 a.m. Eastern Time (9:00 a.m.
Central). To access the call, please dial (480) 629-9863 and ask for the
"Forbes Energy Services" call at least 10 minutes prior to the start time. The
conference call will also be broadcast live via the Internet and can be
accessed through the "Investor Relations" page of Forbes Energy's website,
www.forbesenergyservices.com.

    A telephonic replay of the conference call will be available until May
26, 2009, and may be accessed by calling (303) 590-3030 and using the pass
code 4080060#.  A webcast archive will be available at
www.forbesenergyservices.com shortly after the call and will be accessible for
approximately 30 days. For more information, please contact Donna Washburn at
DRG&E at (713) 529-6600 or email at dmw@drg-e.com.
    

    About Forbes Energy
    
    Forbes Energy Services Ltd. is an independent oilfield services
contractor that provides a broad range of drilling-related and
production-related services to oil and natural gas companies, primarily
onshore in Texas, Mississippi, and Mexico.
    

    Forward-Looking Statements and Regulation G Reconciliation
    
    This press release contains "forward-looking statements," as contemplated
by the Private Securities Litigation Reform Act of 1995, in which the Company
discusses factors it believes may affect its performance in the future. The
accuracy of the Company's assumptions, expectations, beliefs and projections
depend on events or conditions that change over time and are thus susceptible
to change based on actual experience, new developments and known and unknown
risks. The Company gives no assurance that the forward-looking statements will
prove to be correct and does not undertake any duty to update them. The
Company's actual future results might differ from the forward-looking
statements made in this press release for a variety of reasons, which include:
supply and demand for oilfield services and the level of oil and natural gas
prices; the continued uncertainty in the global financial markets and its
effect on domestic spending in the oil and natural gas industry; the Company's
ability to maintain pricing on its core services; the potential for excess
capacity in the industry; and competition. Should one or more of the foregoing
risks or uncertainties materialize, or should the Company's underlying
assumptions prove incorrect, the Company's actual results may vary materially
from those anticipated in its forward-looking statements, and the Company's
business, financial condition and results of operations could be materially
and adversely affected.  Additional factors that you should consider are set
forth in detail in the Risk Factors section of the Company's Annual Report on
Form 10-K for the year ended December 31, 2008 (the "Form 10-K") as well as
other filings the Company has made with the Securities and Exchange
Commission.

    Forbes Energy's financial statements and management's discussion and
analysis of financial condition and results of operations can be found in the
Form 10-Q, which is being will be filed with the Securities and Exchange
Commission and posted on the Company's website.

    This press release also contains references to the non-GAAP financial
measure of earnings, or net income, before interest, income taxes,
depreciation and amortization, or EBITDA.  For a reconciliation of EBITDA to
net income, please see the table at the end of this release. Management's
opinion regarding the usefulness of  EBITDA to investors and a description of
the ways in which management uses such measures can be found on the "Investor
Relations" page of Forbes Energy's website, www.forbesenergyservices.com.


    
    Contacts:     Forbes Energy Services Ltd.
                  L. Melvin Cooper, SVP & CFO
                  361-664-0549
    

    
                  DRG&E
                  Ken Dennard, Managing Partner
                  Ben Burnham, AVP
                  713-529-6600
    

    -Tables to Follow-



    
                      Selected Statement of Operations Data
                                   (Unaudited)
    

    
                                                Three Months Ended March 31,
                                                ----------------------------
                                                    2009             2008
                                                    ----             ----
                                                                (As Restated)
    Revenues
    Well servicing                              $31,539,008      $39,284,338
    Fluid logistics                              31,892,374       31,238,521
                                                 ----------       ----------
      Total revenues                             63,431,382       70,522,859
                                                 ----------       ----------
    

    
    Expenses
    Well servicing                               26,395,709       24,404,782
    Fluid logistics                              23,231,621       22,294,883
    General and administrative                    5,773,879        3,142,681
    Depreciation and amortization                 9,691,372        7,040,023
                                                  ---------        ---------
      Total expenses                             65,092,581       56,882,369
                                                 ----------       ----------
      Operating income (loss)                    (1,661,199)      13,640,490
    

    
    Other income (expense)
    Interest expense                             (6,653,677)      (5,975,126)
    Gain on extinguishment of debt                  973,908                -
    Other income (expense)                           26,533           29,534
                                                     ------           ------
      Income (loss) before taxes                 (7,314,435)       7,694,898
    

    
    Income tax expense (benefit)                 (2,778,945)         172,000
                                                 ----------          -------
      Net income (loss)                         ($4,535,490)      $7,522,898
                                                ===========       ==========
    

    
    Earnings (loss) per share of common stock
      Basic                                          $(0.07)
      Diluted                                         (0.07)
    

    
    Weighted average number of shares outstanding
      Basic                                      62,111,200
      Diluted                                    62,111,200
    

    
    Pro forma earnings per share(1)
      Basic                                                            $0.09
      Diluted                                                           0.09
    

    
    Weighted average number of shares outstanding
      Basic                                                       54,144,700
      Diluted                                                     54,144,700

    
    (1) Historical net income per share was not presented for the three
months ended March 31, 2008 because the Company was structured as a limited
liability company, had limited member units and there were no ownership
interests that were convertible into common stock or a common stock
equivalent.  See Forbes Energy's Form 10-Q for the period ended March 31, 2009
for additional information.
    


    

    
       Selected Balance Sheet Data
       (Unaudited)
                                                 March 31,      December 31,
                                                   2009             2008
                                                   ----             ----
       Cash                                    $39,548,808      $23,469,067
       Accounts receivable                      50,867,905       69,095,522
       Working Capital                          51,427,775       42,707,044
       Intangible assets (net)                  38,744,678       39,459,977
       Total assets                            477,120,766      482,801,391
       Total debt                              219,722,866      212,189,842
       Deferred tax liability                   59,142,240       62,068,620
       Shareholders'/members' equity           154,503,439      158,418,487
    




    
      Selected Operating Data
                                                 Three Months Ended  March 31,
                                                 -----------------------------
                                                     2009             2008
                                                     ----             ----
       Working days                                     63               64
       Rig Hours
         U.S.                                       68,774           75,689
         Mexico                                      4,748                -
                                                     -----              ---
         Total rig hours                            73,522           75,689
    

    Truck hours                                 229,219          220,855




    
       Reconciliation of Adjusted EBITDA to Net Income
       (Unaudited)
    

    
                                                Three Months Ended  March 31,
                                                -----------------------------
                                                    2009             2008
                                                    ----             ----
                                                                (As Restated)
      Net income (loss)                        $(4,535,490)      $7,522,898
      Depreciation and  amortization             9,691,372        7,040,023
      Interest expense                           6,653,677        5,975,126
      Income tax expense (benefit)              (2,778,945)         172,000
                                                ----------          -------
        Adjusted EBITDA                         $9,030,614      $20,710,047
                                                ==========      ===========




    




For further information:

For further information: L. Melvin Cooper, SVP & CFO of Forbes Energy
Services Ltd., +1-361-664-0549; or Ken Dennard, Managing Partner, or Ben
Burnham, AVP, both of DRG&E, +1-713-529-6600, for Forbes Energy Services Ltd.
Web Site: http://www.forbesenergyservices.com

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FORBES ENERGY SERVICES LTD.

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