Bonnett's Energy Services Trust Announces 2007 Second Quarter Results



    CALGARY, Aug. 8 /CNW/ - The Trust generated revenues of $10.9 million in
the second quarter of 2007 compared to $17.0 million for the same period in
2006. EBITDAC(1) declined by 749% to $-3.1 million in the second quarter of
2007 compared to $0.5 million in 2006. Net earnings declined by 303% in the
second quarter of 2007 to $-7.6 million ($-0.65 per diluted unit) compared to
$-1.9 million in 2006 ($-0.17 per diluted unit).
    The Trust's 2007 second quarter results were affected by a longer
break-up period and significantly lower industry utilization levels than the
second quarter of 2006. Spring break-up arrived early and lasted longer in
2007 due to the record snowfall in the winter. In addition, rain in June
further hampered activity levels. Well completions in Canada were down by
close to 35% from the same period in 2006. Canadian activity levels in the
second quarter of 2007 were at the lowest levels in nearly ten years.
    The expansion of the Trust's operations over the last year has further
negatively affected the results in the second quarter of 2007 by increasing
costs and reducing margins. Although this expansion adversely affected the
Trust in the second quarter, the added capacity is expected to position the
Trust well for an expected recovery later in 2007 and 2008. Operating losses
for the expanded divisions amounted to $1.3 million for the second quarter of
2007. In addition, estimated interest costs of $510,000 related to the capital
expenditures of the expansions is included in interest expense for the second
quarter of 2007.
    The Trust received the remaining pieces of its first fracturing spread in
the second quarter of 2007. In addition, 50% of the second spread was received
in this quarter with the remaining pieces being delivered in the third
quarter. The second spread became operational in July of 2007. Since the
second spread has become operational, the Trust has made significant progress
in the fracturing market and expects to see positive cash flow contribution
from its fracturing spreads in the second half of 2007. In the first two
quarters of operation, the Trust successfully completed 49 fracturing jobs
with limited equipment.

    
    Highlights
    ----------

                        -----------------------------------------------------
    ($000's except per          Three Months Ended           Six Months Ended
     unit amounts and                      June 30                    June 30
     jobs completed)       2007     2006  % Change    2007     2006  % Change
                        -----------------------------------------------------
    Revenue              10,878   17,047      (36)  49,541   55,776      (11)
    EBITDAC(1)           (3,122)     481     (749)   6,553   16,580      (60)
    Funds flow from
     operations(2)       (4,357)     175   (2,590)   4,305   16,050      (73)
    Funds flow from
     operations per unit
      Per Unit - Basic    (0.38)    0.02   (2,000)    0.37     1.43      (74)
      Per Unit - Fully
       diluted            (0.38)    0.01   (3,900)    0.37     1.38      (73)
    Net earnings (loss)  (7,553)  (1,875)    (303)  (3,304)   9,250     (136)
    Earnings (loss)
     per unit
      Per Unit - Basic    (0.65)   (0.17)    (282)   (0.29)    0.83     (135)
      Per Unit - Fully
       diluted            (0.65)   (0.17)    (282)   (0.29)    0.80     (136)
    Distribution to
     unitholders          3,474    5,060      (31)   8,073    9,447      (15)
      Distribution per
       unit - basic        0.30     0.45      (33)    0.70     0.84      (17)
    Weighted average
     units
      Basic              11,558   11,245        3   11,529   11,197        3
      Diluted            11,624   11,724       (1)  11,617   11,635        -
    Jobs completed(3)     1,897    3,392      (44)   8,663   10,461      (17)
                        -----------------------------------------------------
                        -----------------------------------------------------
    

    Results From Operations
    ------------------------
    For the quarter ended June 30, 2007, the Trust generated revenues of
$10.9 million a decrease of $6.1 million from revenues generated for the same
quarter in 2006. The Testing Services division, with a decrease of 72%, showed
the largest decrease in revenue generated. The Wireline Services division
showed a year over year decrease in quarterly revenue for the period of 36%.
Offsetting the decline in revenues for the Testing Services and Wireline
Services divisions, the Well Stimulation and Fishing and Rentals divisions
both showed significant increases. The Well Stimulation division increased
revenue by 25% primarily due to the commencement of the fracturing operations.
The Fishing and Rentals division increased revenue 24% was due to the
expansion of the fishing and pipe recovery operations to three additional
locations.
    Utilization rates in the second quarter of 2007 for the Wireline Services
division were 32% lower than the second quarter of 2006. Fewer jobs were
performed in 2007; however, there was an increase in average pricing of 11%.
    Utilization rates for the Testing Services division in the second quarter
of 2007 were 27% lower than for the same period in 2006. Pricing was 16%
higher in the second quarter of 2007; however, the number of jobs performed
was lower than the second quarter of 2006. The Testing Services division was
impacted significantly by the decrease in new well completion activity and
increased competition. Testing services tend to be very portable allowing
competitors to move equipment very easily without the need for support
infrastructure. The more severe slowdown in completion activity in Southern
Alberta has caused a migration of testing equipment into the Northern areas
where completion activity was more active. Once activity levels increase in
Southern Alberta, this situation is expected to improve.
    The Well Stimulation division significantly increased the average price
per job in the second quarter of 2007 versus the second quarter of 2006 due to
the commencement of fracturing operations. The first frac job was performed on
January 6, 2007. The Well Stimulation division completed 80 jobs during the
second quarter of 2007. Of these second quarter jobs, 10 were fracturing jobs,
bringing the total fracturing jobs to 49 for the first two quarters of 2007.
Equipment delays continued to affect operations during the second quarter.
Operating losses for this division for the second quarter of 2007 were
approximately $500,000. The remainder of the first spread was received in the
second quarter but only 50% of the second spread was received by the end of
June. While this limited the type and number of fracturing jobs the division
was able to perform in the first half of the year, management was pleased with
progress made as all 49 jobs were performed successfully.
    The Fishing and Rentals division performed 46% more jobs, but at an
average rate which was 15% lower in the second quarter of 2007 versus the
second quarter of 2006. The increase in the number of jobs performed was due
to the expansion of this division to three additional locations in 2007.
Components of this division have not been in operation for longer than a year
and are still considered to be in the start-up phase. In the second quarter of
2007, operating losses associated with the startup were approximately
$840,000. The number of jobs performed was negatively affected by the lower
drilling rig utilization levels.
    Overall, the Trust had significantly lower utilization levels during the
second quarter of 2007 compared with the second quarter of 2006. Concerns over
natural gas storage levels and pricing in the last half of 2006 and the first
half of 2007 had the effect of reducing drilling and new well completion
budgets. In addition, the Trust's primary areas of operations experienced a
longer than normal break-up period in 2007 due to exceptionally high levels of
snow pack throughout the winter and wet weather in June.
    Gross margin as a percentage of revenue of -16% for the second quarter of
2007 was 181% lower than the same quarter of 2006. This decrease was a result
of the fixed costs relating to the extensive internal expansion combined with
lower levels of drilling and completion activities.

    
                        -----------------------------------------------------
                                      Three Months Ended June 30
    ($000's except jobs
     completed, and                 % of              % of
     utilization rates)    2007  Revenue     2006  Revenue   Change        %
                        -----------------------------------------------------
    Revenue
      Wireline Services   8,274       76   12,945       76   (4,671)     (36)
      Testing Services      725        7    2,596       15   (1,871)     (72)
      Well Stimulation    1,110       10      886        5      224       25
      Fishing and
       Rentals              769        7      620        4      149       24
                        -----------------------------------------------------
                         10,878      100   17,047      100   (6,169)     (36)
    Operating costs      12,642      116   14,872       87   (2,230)     (15)
                        -----------------------------------------------------
    Gross margin         (1,764)     (16)   2,175       13   (3,939)    (181)
                        -----------------------------------------------------
    Revenue per job
     completed
      Wireline Services    6.18        -     5.56        -     0.62       11
      Testing Services     4.14        -     3.58        -     0.56       16
      Well Stimulation    13.88        -     6.87        -     7.01      102
      Fishing and Rentals  2.54        -     3.00        -    (0.46)     (15)
                        -----------------------------------------------------
    Weighted average       5.73        -     5.03        -     0.70       14
                        -----------------------------------------------------
    Jobs completed
     (number)
      Wireline Services   1,339        -    2,330        -     (991)     (43)
      Testing Services      175        -      726        -     (551)     (76)
      Well Stimulation       80        -      129        -      (49)     (38)
      Fishing and Rentals   303        -      207        -       96       46
                        -----------------------------------------------------
                          1,897        -    3,392        -   (1,495)     (44)
                        -----------------------------------------------------
    Utilization (%)
      Wireline Services      20        -       52        -        -        -
      Testing Services        6        -       33        -        -        -
                        -----------------------------------------------------
                        -----------------------------------------------------



                        -----------------------------------------------------
                                       Six Months Ended June 30
    ($000's except jobs
     completed, and                 % of              % of
     utilization rates)    2007  Revenue     2006  Revenue   Change        %
                        -----------------------------------------------------
    Revenue
      Wireline Services  34,131       69   40,345       72   (6,214)     (15)
      Testing Services    6,080       12   10,742       19   (4,662)     (43)
      Well Stimulation    5,241       11    2,170        4    3,071      142
      Fishing and
       Rentals            4,089        8    2,519        5    1,570       62
                        -----------------------------------------------------
                         49,541      100   55,776      100   (6,235)     (11)
    Operating costs      39,993       81   36,354       65    3,639       10
                        -----------------------------------------------------
    Gross margin          9,548       19   19,422       35   (9,874)     (51)
                        -----------------------------------------------------
    Revenue per job
     completed
      Wireline Services    5.84        -     6.37        -    (0.53)      (8)
      Testing Services     3.87        -     3.68        -     0.19        5
      Well Stimulation    15.69        -     6.11        -     9.58      157
      Fishing and Rentals  4.48        -     2.93        -     1.55       53
                        -----------------------------------------------------
    Weighted average       5.72        -     5.33        -     0.39        7
                        -----------------------------------------------------
    Jobs completed
     (number)
      Wireline Services   5,844        -    6,329        -     (485)      (8)
      Testing Services    1,572        -    2,917        -   (1,345)     (46)
      Well Stimulation      334        -      355        -      (21)      (6)
      Fishing and Rentals   913        -      860        -       53        6
                        -----------------------------------------------------
                          8,663        -   10,461        -   (1,798)     (17)
                        -----------------------------------------------------
    Utilization (%)
      Wireline Services      46        -       74        -        -        -
      Testing Services       32        -       61        -        -        -
                        -----------------------------------------------------
                        -----------------------------------------------------

    Capital Expenditures
    --------------------
    During the second quarter of 2007, the Trust added the following:

    -   The Wireline Services division added one swabbing rig and one truck
        mounted wireline unit and associated tools and equipment.
    -   The Testing Services division added miscellaneous equipment to
        support existing operations.
    -   The Well Stimulation division took delivery of the remaining pieces
        of the first fracturing spread. In addition, approximately 50% of
        the second spread was delivered.
    -   The Fishing and Rentals division added rentals, and fishing and pipe
        recovery tools for the new fishing and rentals locations.
    -   The Trust continued to convert divisions to its electronic field
        ticketing system.
    

    Liquidity
    ---------
    The Trust's working capital ratio at June 30, 2007 was 2.14 (December 31,
2006 - 1.59) (calculated as current assets divided by current liabilities
excluding current portion of long-term debt).

    The Trust's working capital deficiency including current portion of
long-term debt is $4.9 million at June 30, 2007. The Trust is committed to
fully repay its revolving acquisition facility as described in note 5 of its
June 30, 2007 financial statements. The Trust has committed to secure
additional sources of capital funding over the next three months. The current
working capital deficiency will be funded by internal cashflow and securing of
additional financing resources.

    Long-term debt
    --------------
    At June 30, 2006, the Trust had aggregate debt of $70.6 million comprised
of $14.7 million of current portion of long-term debt and $55.9 million of
long-term debt.

    Bonnett's Energy Services, L.P., an indirect wholly-owned subsidiary of
the Trust, has negotiated credit facilities with a syndicate of Canadian
banks. The credit facilities consist of an extendible revolving acquisition
facility of up to $15.0 million and an extendible revolving operating facility
of up to $35.0 million and $50.0 million non-revolving term facility. These
facilities are interest only until March 31, 2008. Thereafter the revolving
acquisition facility and the term facility will be amortized over six years
and bear interest at varying rates that fluctuate with the prime rate and on
ratios calculated on the Trust's financial performance. The Credit Facilities
are guaranteed by the Trust, Bonnett's Holding Trust and Bonnett's Energy
Services Ltd. and collateral for the Credit Facilities are debentures from
Bonnett's Energy Services, L.P., and the guarantors providing security over
all present and after acquired personal property, and a floating charge over
all real property of such parties, as well as security under the Bank Act
(Canada). The Credit Facilities are subject to an annual review. If the Credit
Facilities are not renewed at that time all outstanding debt will become due
364 days from the review date. The fair value of the fixed rate term debt is
not materially different from its carrying values.

    Amounts owing under these Credit Facilities rank in priority to amounts
payable to the Trust from Bonnett's Energy Services, L.P., Bonnett's Energy
Services Ltd. and Bonnett's Holding Trust, and the payments of any such
amounts will be prohibited upon a default under the credit agreement. Subject
to certain cash flow tests, the Trust may make distributions to the
unitholders so long as no default has occurred or would result from such
distribution.

    On April 9, 2007, the Trust syndicated and amended its credit facilities
including an increase in the committed amount. The Trust and the banking
syndicate have agreed to amend the terms of the credit agreement to ensure
that the Trust is in and will continue to be in compliance with the financial
covenants contained in the credit agreement. Management expects that the
amendment of the credit agreement will, among other things, result in (a) the
amount of the revolving capital acquisition facility being increased from
$15 million to $30 million and the amount of the revolving operating facility
being decreased from $35 million to $20 million subject to certain margin
calculations; (b) the maturity dates of the revolving operating facility and
the non-revolving term facility being October 31, 2007, subject to an
extension at the option of the Trust for an additional one year period up to
October 31, 2008; and (c) the maturity date of the revolving capital
acquisition facility being October 31, 2007. Management is currently pursuing
alternative sources of financing in order to replace the revolving capital
acquisition facility prior to its maturity, which as at June 30, 2007 had
$11.9 million outstanding.

    Distributions
    -------------
    The Trust made distributions of $0.15 per Unit for January and February
of 2007 and decreased the distribution level to $0.10 per Unit per month for
March through June. All of the distributions completed in the second quarter
of 2007 have been made against unitholders equity. The actual distributions
were paid using funds available from a variety of sources including cash flow
from operating activities and available operating lines of credit.
    On March 22, 2007 the Trust announced the commencement of a Distribution
Reinvestment Plan and Optional Unit Purchase Plan (the "DRIP"). Under the
terms of the DRIP, eligible unitholders of the Trust may elect to
automatically reinvest their regular monthly distributions in additional trust
units of Bonnett's. Unitholders who elect to reinvest cash distributions under
the DRIP will receive Units at a price equal to 95% of the average closing
price of the Units on the five day trading period ending on the business day
immediately prior to the distribution payment date. All of the executive
management team and the board of directors have elected to participate in the
DRIP.

    Outlook
    -------

    General industry conditions

    Concerns over natural gas inventory levels have caused prices to weaken
during the second half of 2006 and into the first half of 2007. The result has
been a decrease in activity levels that has extended into the first half of
2007. These lower levels of activity are also expected to continue into the
third quarter of 2007. Shallow areas of the Western Canadian Sedimentary Basin
("WCSB") have seen the most significant decrease in activity; however,
activity levels in deeper areas of the basin have also seen a slowdown in the
fourth quarter of 2006 and the first half of 2007. Further affecting activity
in the deeper areas of the basin is increased competition resulting from the
migration of equipment from other areas. As activity levels increase in the
shallow areas of the WCSB, this migration is expected to reverse.
    Most analysts feel activity levels in the Western Canadian Sedimentary
Basin will improve somewhat in the third and fourth quarters of 2007 and show
further gradual improvement in 2008.
    The Trust executed a large capital program in 2006, which has increased
capacity significantly. Most of this equipment has been deployed at the end of
the second quarter of 2007. The benefits of this expansion should be reflected
in the results of the second half of 2007 and for 2008.
    The successful entry of the Trust into the fracturing market is expected
to contribute significantly going forward. The management and employees of
this division are highly skilled and have extensive fracturing experience.
This experience is allowing this division to quickly gain a reputation for
providing a high quality service in Northern Alberta and British Columbia.
Although the equipment delays have been an ongoing issue in the start-up
phase, management is expecting this division to contribute positive cash flow
in the second half of 2007. The fracturing division remains to be a very
important growth area for the Trust over the long-term.

    2007 Guidance

    The guidance given by the Trust in March of 2007 was based on a normal
spring break-up and a relatively strong recovery in Canadian drilling activity
in the third and fourth quarters of 2007. At that time natural gas storage
levels were well below 2006 levels and the outlook for the second half of 2007
was very positive. As previously discussed, the 2007 spring break-up was much
longer than normal due to a very large snow pack and wet weather. Furthermore,
North American natural gas storage levels have risen to levels above 2006 due
to record drilling in the U.S. and higher levels of imported liquified natural
gas. Most analysts are now predicting a much more moderate recovery in
Canadian drilling activity in 2007 and have deferred predictions of a stronger
recovery until 2008. Based on this updated information, the Trust is updating
its 2007 revenue guidance to be between $115 million and $125 million. 2007
EBITDAC is forecasted to be between $23 million and $28 million and funds flow
from operations to be between $18 million and $23 million.

    
        Notes:
        (1) Earnings before interest, taxes, depreciation, amortization and
            unit based compensation and certain other items ("EBITDAC") is
            not a recognized measure under Canadian Generally Accepted
            Accounting Principles (GAAP). Management believes that in
            addition to net earnings, EBITDAC is a useful supplemental
            measure as it provides an indication of the results generated by
            the Trust's principal business activities prior to consideration
            of how those activities are financed or how the results are
            taxed. These measures are identified and presented, where
            appropriate, together with reconciliations to the equivalent GAAP
            measure. However, they should not be used as an alternative to
            GAAP, because they may not be consistent with calculations of
            other companies or trusts.

        (2) Funds flow or funds flow from operations, refers to cash flow
            from operations before changes in non-cash working capital. The
            Trust views cash flow from operating activities before changes in
            non-cash working capital balances, hereafter referred to as Funds
            Flow, as a measure of liquidity, and believes that Funds Flow is
            a metric used by many investors to assess the financial
            performance of the Trust. As the Trust will distribute a portion
            of its cash on an ongoing basis, the Trust believes that Funds
            Flow is an appropriate consideration in determining funds
            available for distribution to unitholders. Although changes in
            non-cash working capital balances will impact cash available to
            finance distributions, these changes will be a source of cash in
            one period and a use of cash in another depending on changes in
            the level of activity in a particular period due to seasonality
            and other factors. Absent a sustained period of growth in the
            Trust's business, changes in non-cash working capital will
            generally not be a use of cash by the Trust over a longer period
            of time, although that may be the case from one quarter to the
            next. Given that these changes are not predictable and tend to
            even out over time, management does not believe it is appropriate
            to include such changes in determining cash flow from operating
            activities being a measure used to indicate capacity of the Trust
            to generate cash flow for paying distributions in the future. Any
            use of cash from an increase in working capital in a particular
            period will be financed by the Trust's credit facilities and
            repaid when non-cash working capital decreases and cash is
            generated. See the heading "Funds flow from Operations" for a
            reconciliation to the equivalent GAAP measure. Funds flow should
            not be used as an alternative to GAAP, because it may not be
            consistent with calculations of other companies or trusts.

        (3) The Trust's method of calculating jobs completed may differ from
            other companies or trusts and may not be comparable to measures
            used by other companies or trusts. Jobs completed are the total
            of all jobs completed during the period.


    -------------------------------------------------------------------------
    Bonnett's Energy Services Trust
    Consolidated Balance Sheets
    (thousands of dollars)
    (Unaudited)

                                                        June 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------
    Assets

    Current assets
      Cash                                                  306        2,667
      Accounts receivable                                14,720       29,483
      Inventory                                           1,867        2,076
      Prepaid expenses and deposits                       1,562        1,307
    -------------------------------------------------------------------------
                                                         18,455       35,533

    Property and equipment                              124,856      118,681
    Intangible assets                                     7,167        8,859
    Future income tax assets                              1,715        1,574
    Goodwill                                             46,658       46,758
    -------------------------------------------------------------------------
                                                        198,851      211,405
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Unitholders' Equity

    Current liabilities
      Accounts payable and accrued liabilities            7,463       20,372
      Distributions payable                               1,162        1,724
      Current portion of long-term debt                  14,699          283
    -------------------------------------------------------------------------
                                                         23,324       22,379

    Long-term debt                                       55,880       59,637
    -------------------------------------------------------------------------
                                                         79,204       82,016
    -------------------------------------------------------------------------

    Unitholders' Equity
      Trust units                                       130,953      129,597
      Contributed surplus                                   708          512
      Deficit                                           (12,014)        (720)
    -------------------------------------------------------------------------
                                                        119,647      129,389
    -------------------------------------------------------------------------

                                                        198,851      211,405
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Bonnett's Energy Services Trust
    Consolidated Statements of Operations (Loss) and Comprehensive Income
    (dollars in thousands except per unit amounts)
    (Unaudited)

                                Three Months Ended          Six Months Ended
                                           June 30                   June 30
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------

    Revenue                    10,878       17,047       49,541       55,776
    -------------------------------------------------------------------------

    Expenses
      Operating costs          12,642       14,872       39,993       36,354
      General and
       administrative           1,358        1,694        2,995        2,842
      Amortization of
       property and equipment   3,007        1,539        5,541        2,852
      Amortization of
       intangible assets          830          792        1,692        1,535
      Interest - current          108           25          166           43
      Interest on long-term
       debt                     1,127          281        2,082          423
      Unit-based compensation     107          125          223          172
      Deferred finance costs        -           53            -           73
    -------------------------------------------------------------------------
                               19,179       19,381       52,692       44,294
    -------------------------------------------------------------------------

    Income (loss) before
     other items               (8,301)      (2,334)      (3,151)      11,482
      Loss on sale of fixed
       assets                      97           15          289           22

    -------------------------------------------------------------------------
    Income (loss) from
     operations before
     income taxes              (8,398)      (2,349)      (3,440)      11,460
    -------------------------------------------------------------------------

    Income tax expense
     (recovery)
      Current                       -            -            -           64
      Future                     (845)        (474)        (136)       2,146
    -------------------------------------------------------------------------
                                 (845)        (474)        (136)       2,210
    -------------------------------------------------------------------------

    Net income (loss) for
     the period                (7,553)      (1,875)      (3,304)       9,250
    Other comprehensive
     income net of tax              -            -            -            -
    -------------------------------------------------------------------------
    Comprehensive income
     (loss)                    (7,553)           -       (3,304)           -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (loss) per unit -
     basic                      (0.65)       (0.17)       (0.29)        0.83
    Earnings (loss) per unit -
     diluted                    (0.65)       (0.17)       (0.29)        0.80

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Bonnett's Energy Services Trust
    Consolidated Statements of Retained Earnings (Deficit)
    (thousands of dollars)
    (Unaudited)

                                Three Months Ended          Six Months Ended
                                           June 30                   June 30
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------

    Retained earnings
     (deficit), beginning
     of period                   (987)       9,139         (720)       2,401
    Net income (loss) for
     the period                (7,553)      (1,875)      (3,304)       9,250
    Distributions              (3,474)      (5,060)      (8,073)      (9,447)
    Adoption of new
     accounting standards
     on financial instruments       -            -           83            -
    -------------------------------------------------------------------------
    Retained earnings
     (deficit), end of
     period                   (12,014)       2,204      (12,014)       2,204
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Bonnett's Energy Services Trust
    Consolidated Statements of Cash Flows
    (thousands of dollars)
    (Unaudited)

                                Three Months Ended          Six Months Ended
                                           June 30                   June 30
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
    Cash flows from
     operating activities
    Net income (loss) for
     the period                (7,553)      (1,875)      (3,304)       9,250
    Items not involving cash:
    Amortization of property
     and equipment              3,007        1,539        5,541        2,852
    Amortization of
     intangible assets            830          792        1,692        1,535
    Deferred finance costs          -           53            -           73
    Future income tax
     expense (recovery)          (845)        (474)        (136)       2,146
    Loss on sale of fixed
     assets                        97           15          289           22
    Unit-based compensation       107          125          223          172
    -------------------------------------------------------------------------
    Funds flow from
     (used in) Operations      (4,357)         175        4,305       16,050

    Net change in non-cash
     working capital items     13,664       11,489        8,045       (1,721)
    -------------------------------------------------------------------------
    Cash flow from
     operations, including
     changes in non-cash
     working capital items      9,307       11,664       12,350       14,329
    -------------------------------------------------------------------------

    Cash flows from financing
     activities
    -------------------------------------------------------------------------
    Monthly distributions
     paid                      (2,372)      (5,060)      (7,545)      (9,447)
      Advances on long term
       debt net of repayment     (817)       5,872       10,852       19,768
    Issue of Trust units for
     cash                         155            -          248          (30)
    Trust unit issue costs          -            -          (12)         618
    -------------------------------------------------------------------------
                               (3,034)         812        3,543       10,909
    -------------------------------------------------------------------------

    Cash flows from investing
     activities
    -------------------------------------------------------------------------
    Acquisition of
     Independent Wireline Inc.      -            -            -      (10,587)
    Refund of Goodwill on
     acquisition on N2 Thousand   100            -          100            -
    Proceeds on disposal of
     property, equipment
     and other assets             268           44          858          181
    Changes in non-cash
     investing working
     capital                   (2,557)         623       (6,349)         880
    Purchase of equipment
     and other assets          (5,214)     (14,388)     (12,863)     (25,347)
    -------------------------------------------------------------------------
                               (7,403)     (13,721)     (18,254)     (34,873)
    -------------------------------------------------------------------------

    Decrease in cash
     (increase in bank
     indebtedness)             (1,130)      (1,245)      (2,361)      (9,635)
    -------------------------------------------------------------------------

    Cash (bank indebtedness),
     beginning of period        1,436       (2,362)       2,667        6,028
    -------------------------------------------------------------------------

    Cash (bank indebtedness),
     end of period                306       (3,607)         306       (3,607)
    -------------------------------------------------------------------------

    Supplementary cash
     flow information
    Interest taxes paid             -          814            -          814
    Interest Paid               1,235          306            -          466
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Disclosure Regarding Forward-Looking Statements
    -----------------------------------------------
    Certain statements contained in this news release constitute
forward-looking statements. When used in this document, the words "may",
"would", "could", "will", "intend", "plan", "anticipate", "believe", "seek",
"propose", "estimate", "expect", and similar expressions, as they relate to
the Trust, are intended to identify forward-looking statements. Such
statements reflect the Trust's current views with respect to future events and
are subject to certain risks, uncertainties and assumptions, including,
without limitation, those described in this news release under the heading
"Outlook". Many factors could cause the Trust's actual results, performance or
achievements to vary from those anticipated in this news release. Should one
or more of these risks or uncertainties materialize, or should assumptions
underlying forward-looking statements prove incorrect, actual results may vary
materially from those described in this news release as intended, planned,
anticipated, believed, estimated or expected. Except where required by law,
the Trust does not assume any obligation to update these forward-looking
statements if conditions or opinions should change. Readers should not place
undue reliance on forward-looking statements.

    Additional Information
    ----------------------
    Additional information relating to the Trust is filed on SEDAR and can be
viewed at www.sedar.com. This information includes the Trust's Annual
Information Form dated March 31, 2007. Information can also be obtained by
contacting the Trust at Bonnett's Energy Services Ltd., R.R. 2, Site 33, Box
1, Grande Prairie, Alberta T8V 2Z9. Information is also available at the
Trust's website at www.bonnettsenergy.com.

    %SEDAR: 00022595E




For further information:

For further information: Bonnett's Energy Services Ltd., R.R. 2, Site
33, Box 1, Grande Prairie, Alberta, T8V 2Z9. Information is also available at
the Trust's website at www.bonnettsenergy.com

Organization Profile

BONNETT'S ENERGY SERVICES TRUST

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