Calfrac Announces Third Quarter Results

CALGARY, Nov. 4 /CNW/ - Calfrac Well Services Ltd. ("Calfrac" or "the Company") (TSX-CFW) announces its financial and operating results for the three months and nine months ended September 30, 2009.

    
    HIGHLIGHTS

    -------------------------------------------------------------------------
                         Three Months Ended            Nine Months Ended
                            September 30,                 September 30,
                      2009      2008    Change      2009      2008    Change
    -------------------------------------------------------------------------
    (000s, except       ($)       ($)       (%)       ($)       ($)       (%)
     per share and
     unit data)
    (unaudited)

    Financial

    Revenue        133,261   151,650       (12)  418,376   391,933         7
    Operating
     income(1)      16,499    27,812       (41)   47,978    56,281       (15)
    Net income
     (loss)          2,842    11,203       (75)   (6,400)   10,003      (164)
      Per share
       - basic        0.08      0.30       (73)    (0.17)     0.27      (163)
      Per share
       - diluted      0.08      0.30       (73)    (0.17)     0.27      (163)
    Funds
     provided by
     operations(2)  12,199    27,128       (55)   35,040    55,909       (37)
      Per share
       - basic        0.32      0.72       (56)     0.93      1.48       (37)
      Per share
       - diluted      0.32      0.72       (56)     0.93      1.48       (37)
    EBITDA(3)       15,112    26,983       (44)   45,397    57,216       (21)
      Per share
       - basic        0.40      0.71       (44)     1.20      1.52       (21)
      Per share
       - diluted      0.40      0.71       (44)     1.20      1.52       (21)
    Working capital
     (end of
     period)       103,331   104,700        (1)  103,331   104,700        (1)
    Shareholders'
     equity (end
     of period)    378,972   378,890         -   378,972   378,890         -
    Weighted
     average common
     shares
     outstanding
     (No.)
      Basic         37,742    37,843         -    37,742    37,653         -
      Diluted       37,742    37,853         -    37,742    37,681         -
    -------------------------------------------------------------------------

    Operating (end
     of period)
    Pumping
     horsepower
     (000s)                                          371       287        29
    Coiled tubing
     units (No.)                                      18        18         -
    Cementing
     units (No.)                                      21        18        17
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Operating income is defined as net income (loss) plus depreciation,
        interest, equity share of net income from long-term investments,
        foreign exchange gains or losses, gains or losses on disposal of
        capital assets, income taxes and non-controlling interest. Management
        believes that operating income is a useful supplemental measure as it
        provides an indication of the financial results generated by
        Calfrac's business segments prior to consideration of how these
        segments are financed or how they are taxed. Operating income is a
        measure that does not have any standardized meaning under generally
        accepted accounting principles ("GAAP") and, accordingly, may not be
        comparable to similar measures used by other companies.

    (2) Funds provided by operations is defined as cash provided by operating
        activities before the net change in non-cash operating assets and
        liabilities. Funds provided by operations is a measure that provides
        shareholders and potential investors with additional information
        regarding the Company's liquidity and its ability to generate funds
        to finance its operations. Management utilizes this measure to assess
        the Company's ability to finance operating activities and capital
        expenditures. Funds provided by operations is a measure that does not
        have any standardized meaning prescribed under GAAP and, accordingly,
        may not be comparable to similar measures used by other companies.

    (3) EBITDA is defined as net income (loss) before interest, taxes,
        depreciation, amortization and non-controlling interest. EBITDA is
        presented because it is frequently used by securities analysts and
        others for evaluating companies and their ability to service debt.
        EBITDA is a measure that does not have any standardized meaning
        prescribed under GAAP and, accordingly, may not be comparable to
        similar measures used by other companies.
    

PRESIDENT'S MESSAGE

I am pleased to present Calfrac's operating and financial highlights for the three and nine months ended September 30, 2009 and discuss our prospects for the remainder of the year. During the third quarter, our Company:

    
    -   acquired the fracturing assets of a U.S. competitor, Pure Energy
        Services Ltd. ("Pure"), for a total purchase price of approximately
        $44.5 million, including transaction costs;

    -   entered into a definitive agreement to acquire Century Oilfield
        Services Inc. ("Century") for $90.0 million plus the assumption of
        approximately $30.0 million in indebtedness and other liabilities on
        an aggregate net basis;

    -   negotiated an increase to the Company's credit facilities to $170.0
        million, which includes a $35.0 million incremental facility
        available upon closing of the Century acquisition, with a syndicate
        of Canadian financial institutions;

    -   commenced cementing operations in the Chicontepec region of Mexico;
        and

    -   experienced strong levels of fracturing and coiled tubing activity in
        Western Siberia.

    Financial Highlights
    -------------------------------------------------------------------------

    For the three months ended September 30, 2009, the Company recorded:

    -   revenue of $133.3 million, a decrease of 12 percent from the third
        quarter of 2008;

    -   operating income of $16.5 million versus $27.8 million in the
        comparable period in 2008;

    -   net income of $2.8 million or $0.08 per share, including a foreign
        exchange loss before income taxes of $1.8 million, compared to $11.2
        million or $0.30 per share in the same period in 2008; and

    -   a $5.5 million or $0.15 per share future income tax recovery arising
        from a reversal of the increase in the deferred credit balance that
        was recorded in the first half of the year as the Company has
        adjusted its estimated tax position for the full year in Canada.

    For the nine months ended September 30, 2009, the Company's results
included:

    -   revenue of $418.4 million, an increase of 7 percent from the
        comparable period of 2008;

    -   a net loss of $6.4 million or $0.17 per share, including a foreign
        exchange loss of $3.9 million, compared to net income of $10.0
        million or $0.27 per share in the same period in 2008;

    -   funds provided by operations of $35.0 million or $0.93 per share
        versus $55.9 million or $1.48 per share in the same quarter of 2008;
        and

    -   working capital of $103.3 million and $72.9 million of unutilized
        credit facilities at the end of the period.
    

Overall, Calfrac continues to benefit from its solid presence in several key North American unconventional resource plays, where drilling activity remains relatively strong and revenue per job is high, as well as the positive momentum achieved in its international markets.

    
    Operational Highlights
    -------------------------------------------------------------------------
    

Canada

During the third quarter, fracturing and coiled tubing activity in western Canada continued to be concentrated in the unconventional natural gas resource plays of the Montney and Horn River basins located in northern Alberta and northeast British Columbia. The Company completed a large-scale operation working together with a major oil and natural gas company in the Horn River region as the general contractor as well as maintained steady activity in the Deep Basin under the terms of a take-or-pay contract. Calfrac also expanded its presence in the Bakken oil play in southeast Saskatchewan during the third quarter. However, shallow gas and coalbed methane fracturing activity levels remained relatively slow during the quarter as a result of the low natural gas price environment. A full quarter's benefit was realized from the cost rationalization measures undertaken early in the second quarter, which partially mitigated the financial impact of the drilling slowdown in western Canada.

United States

In August, Calfrac acquired the fracturing assets of a U.S. competitor for approximately $44.5 million. This was a counter-cyclical acquisition deliberately undertaken during a period of lower activity levels and associated reduced asset valuations. This form of acquisition is in keeping with Calfrac's model for growth, which emphasizes organic growth during periods of higher asset pricing and cost effective acquisitions during periods of lower activity. This equipment had been deployed by the competitor in the Piceance Basin and it continued to operate in this basin as the Company experienced a resurgence in activity in this operating region during the latter part of the third quarter. Activity levels in the Denver Julesburg Basin also increased from the historical low levels experienced during the second quarter. In Arkansas, fracturing and cementing activity levels remained strong during the third quarter while competitive pricing pressures appear to have stabilized.

Russia

In Western Siberia, strong fracturing and coiled tubing activity levels resulted in strong financial performance from this geographic segment. However, Calfrac's reported Canadian dollar financial results were negatively impacted by an 18 percent decline in the value of the Russian rouble from the third quarter of 2008. The Company is currently preparing tenders for the 2010 annual contract bid process and is optimistic about Calfrac's prospects for the upcoming year.

Mexico

The Company's fracturing activity in the Chicontepec region increased significantly from the second quarter of 2009 due to the deployment of a second fracturing spread and the impact of a full quarter of operations offsetting a decline in fracturing activity in the Burgos field. The Company also deployed six cementing units from Canada into Mexico during the third quarter and early in the fourth quarter and commenced cementing operations in Chicontepec in mid-September.

Argentina

During the third quarter, activity in the Company's cementing operations in Argentina declined slightly from the record levels experienced in the previous three-month period, however, Calfrac continues to generate strong operating margins in this market. The Company employed a conservative approach in entering this new market during the second quarter of 2008 and continues to prudently evaluate and develop new market opportunities as the Argentina business environment evolves.

Corporate

On September 21, 2009, Calfrac announced that it had entered into a definitive agreement to pay $90.0 million for all of the issued and outstanding common shares of Century Oilfield Services Inc. plus the assumption of approximately $30.0 million in indebtedness and other liabilities on an aggregate net basis. This transaction is scheduled to close in mid-November 2009. This transaction would provide the Company with equipment built similar to Calfrac's specifications at a good valuation, a larger presence within the Montney, Horn River and Bakken unconventional resource plays and make Calfrac the largest Canadian fracturing service provider in terms of fracturing pumping capacity.

Also during the third quarter, Calfrac purchased the fracturing assets of a U.S. competitor, Pure Energy Services Ltd. for total consideration of approximately $44.5 million and added approximately 45,000 of pumping horsepower. Pure Energy's equipment was manufactured to similar specifications as a majority of Calfrac's equipment fleet and averages less than three years old.

During the third quarter, and in conjunction with the two acquisitions discussed above, the Company negotiated an increase to its credit facilities from $90.0 million to $170.0 million with a consortium of Canadian financial institutions, including a $35.0 million incremental facility available upon closing of the Century acquisition. The terms of the new covenant structure are more favourable than the previous facility, providing further flexibility to the Company.

    
    Outlook and Business Prospects
    -------------------------------------------------------------------------
    

The global economic slowdown has reduced the demand for oil and natural gas which has led to a significant decline in drilling activity in Canada and the United States as well as increased price competition for oilfield services. North American natural gas prices are anticipated to remain at lower levels over the short term. The Company has thoroughly realigned its cost structure through significant workforce reductions in Canada and the United States, wage and retirement contribution rollbacks as well as cuts to discretionary operating expenses. The Company also suspended primary cementing operations in the Canadian market during April and redeployed six cementing units into Mexico during the third quarter and early in the fourth quarter. These measures have contributed to maintaining the Company's strong financial condition as we enter the fourth quarter. Working capital as at September 30, 2009 was approximately $103.3 million.

Fracturing and coiled tubing activity levels in Canada are expected to improve in the fourth quarter and into 2010. Oil and natural gas drilling and completion activity is anticipated to be focused in the unconventional resource plays of northwest Alberta, northeast British Columbia and southeast Saskatchewan. With the closing of the acquisition of Century, Calfrac will have a larger presence in the fracturing and coiled tubing markets in Canada.

In the United States, fracturing and cementing activity in the Fayetteville shale play of Arkansas is expected to remain relatively strong throughout the remainder of 2009. While the Company experienced significant pricing pressure in this market earlier in 2009, Calfrac believes that pricing levels have stabilized. The addition of the fracturing assets acquired from Pure during the third quarter has allowed Calfrac to capitalize on the increase in completion activity in the Rocky Mountain region that has occurred in the last quarter. Calfrac believes that activity levels in this region will be reasonably strong throughout the remainder of the year. Early in the fourth quarter, the Company redeployed a large fracturing crew from the Rocky Mountain region to Pennsylvania as it commenced operations servicing the Marcellus shale play.

Calfrac recently deployed a sixth coiled tubing unit into Western Siberia and it is expected to be operational late in the fourth quarter of 2009. The annual contract tender process is currently underway in Russia and the Company is optimistic that its three fracturing spreads and six coiled tubing units will be highly utilized during 2010.

The Company commenced fracturing operations in Poza Rica, Mexico servicing the Chicontepec oil and natural gas field for Pemex during the second quarter and continued to diversify its pressure pumping operations in Mexico with the commencement of cementing operations during September. Calfrac's Mexican equipment fleet is currently comprised of three fracturing spreads and six cementing units. This expansion is anticipated to lead to higher levels of overall equipment utilization and to improve the financial performance of this geographic segment for the remainder of 2009 and into the future. Calfrac added a third cementing unit in Argentina during the third quarter of 2009. The Company's Latin America management team will continue to evaluate growth opportunities to broaden the scale of these operations in this market.

The Company has negotiated with its lenders to increase its credit facilities by $80.0 million to $170.0 million, including a $35.0 million incremental facility available upon the closing of the Century acquisition. At September 30, 2009, Calfrac has utilized approximately $62.1 million of these facilities with remaining borrowing capacity of approximately $107.9 million, including a $35.0 million incremental facility available upon closing of the Century acquisition, should it be required.

Overall, demand for pressure pumping services in North America over the short term remains unclear, however, Calfrac's long-term outlook for the pressure pumping industry remains strong. Calfrac has rationalized its cost structure and streamlined its operating efficiencies. Calfrac's geographical diversification continues to benefit the Company and it believes that the improving financial performance of its international segments can be extended. The Company will maintain its strong balance sheet and continue to execute on its strategy through these difficult market conditions. Calfrac believes that the strengths of its business model and its conservative approach to the current economic challenges leave it well-positioned to capitalize on future opportunities.

    
    On behalf of the Board of Directors,

    Douglas R. Ramsay
    President & Chief Executive Officer

    November 4, 2009

    2009 Overview
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    In the third quarter of 2009, the Company:

    -   generated revenue of $133.3 million versus $151.7 million in the
        third quarter of 2008;

    -   reported net income of $2.8 million or $0.08 per share, including a
        $5.5 million future income tax recovery arising from a reversal of
        the increase in the deferred credit balance that was recorded in the
        first half of the year as the Company has adjusted its estimated tax
        position for the full year in Canada, compared to $11.2 million or
        $0.30 per share in the comparable 2008 period;

    -   announced the acquisition of Century Oilfield Services Inc. for $90.0
        million plus the assumption of approximately $30.0 million in
        indebtedness and other liabilities on an aggregate net basis, the
        closing of which is to occur in mid-November 2009;

    -   acquired the fracturing assets of a U.S. competitor, Pure Energy
        Services Ltd., for a total purchase price of approximately $44.5
        million;

    -   negotiated an increase to the Company's credit facilities to $170.0
        million, including a $35.0 million incremental facility available
        upon the closing of the Century acquisition for a period of
        approximately six months thereafter subject to extension at the
        lender's discretion, with a syndicate of Canadian financial
        institutions; and

    -   recorded a foreign exchange loss of $1.8 million versus $0.7 million
        in the comparable period of 2008.

    For the nine months ended September 30, 2009 the Company:

    -   increased revenue by 7 percent to $418.4 million from $391.9 million
        in the comparative period in 2008;

    -   reported a net loss of $6.4 million or $0.17 per share compared to
        net income of $10.0 million or $0.27 per share in the comparable 2008
        period;

    -   incurred capital expenditures of $83.9 million, including the
        acquisition of Pure's fracturing assets, primarily to bolster the
        Company's fracturing equipment fleet;

    -   combined Calfrac's Mexico and Argentina operations under an
        experienced management team to form a new Latin America division;

    -   initiated cost reduction measures in Canada and the United States
        through workforce planning which resulted in restructuring costs of
        approximately $1.5 million during the first nine months of 2009; and

    -   incurred a foreign exchange loss of $3.9 million versus a foreign
        exchange gain of $0.8 million in the comparable period of 2008.


    Financial Overview - Three Months Ended September 30, 2009 Versus 2008
    -------------------------------------------------------------------------

    Canada

    -------------------------------------------------------------------------
    Three Months Ended September 30,              2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                     45,463     75,294        (40)
    Expenses
      Operating                                 37,221     55,542        (33)
      Selling, General and
       Administrative (SG&A)                     2,152      3,064        (30)
                                              -------------------------------
                                                39,373     58,606        (33)
                                              -------------------------------
    Operating income(1)                          6,090     16,688        (64)
    Operating income (%)                         13.4%      22.2%        (40)
    Fracturing revenue per job ($)              83,910     68,966         22
    Number of fracturing jobs                      496        915        (46)
    Coiled tubing revenue per job ($)           14,784     11,384         30
    Number of coiled tubing jobs                   260        738        (65)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    

Revenue

Revenue from Calfrac's Canadian operations during the third quarter of 2009 was $45.5 million versus $75.3 million in the comparable three-month period of 2008. The 40 percent decrease in revenue was primarily due to lower fracturing and coiled tubing activity and the impact of suspending cementing operations in Canada during the second quarter of 2009 offset partially by the completion of larger jobs in the unconventional resource plays located in northern Alberta and northeast British Columbia.

Operating Expenses

Operating expenses in Canada decreased by 33 percent to $37.2 million during the third quarter of 2009 from $55.5 million in the same period of 2008. The decrease in Canadian operating expenses was mainly due to lower overall fracturing and coiled tubing activity levels combined with lower personnel costs as a result of the impact of restructuring initiatives undertaken during the second quarter of 2009.

SG&A Expenses

SG&A expenses for Calfrac's Canadian operations during the third quarter of 2009 decreased from the corresponding period in 2008 by 30 percent to $2.2 million primarily due to lower compensation expenses.

United States

    
    -------------------------------------------------------------------------
    Three Months Ended September 30,              2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational and
     exchange rate information)                     ($)        ($)        (%)
    (unaudited)

    Revenue                                     52,524     54,568         (4)
    Expenses
      Operating                                 45,257     38,985         16
      SG&A                                       1,585      2,184        (27)
                                              -------------------------------
                                                46,842     41,169         14
                                              -------------------------------
    Operating income(1)                          5,682     13,399        (58)
    Operating income (%)                         10.8%      24.6%        (56)
    Fracturing revenue per job ($)              56,313     59,197         (5)
    Number of fracturing jobs                      883        859          3
    Cementing revenue per job ($)               18,786     13,869         35
    Number of cementing jobs                       149        268        (44)
    Cdn$/US$ average exchange rate(2)           1.0976     1.0416          5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    (2) Source: Bank of Canada.
    

Revenue

Revenue from Calfrac's United States operations decreased during the third quarter of 2009 to $52.5 million from $54.6 million in the comparable quarter of 2008. The decrease in United States revenue was due primarily to lower fracturing activity levels in the Rocky Mountain region, lower cementing activity levels and competitive pricing pressures, offset partially by the appreciation in the value of the United States dollar, higher fracturing activity levels and job sizes in Arkansas and the completion of larger cementing jobs.

Operating Expenses

Operating expenses in the United States were $45.3 million for the third quarter of 2009, an increase of 16 percent from the comparative period in 2008 primarily due to the impact of the higher value of the United States dollar, increased usage of proppant resulting from the completion of larger fracturing jobs in Arkansas and higher equipment repair expenses.

SG&A Expenses

SG&A expenses in the United States during the third quarter of 2009 decreased by 27 percent from the comparable period in 2008 to $1.6 million primarily due to lower personnel expenses, offset partially by the appreciation in the value of the United States dollar.

Russia

    
    -------------------------------------------------------------------------
    Three Months Ended September 30,              2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational and
     exchange rate information)                     ($)        ($)        (%)
    (unaudited)

    Revenue                                     17,774     15,197         17
    Expenses
      Operating                                 10,735     10,561          2
      SG&A                                         888      1,061        (16)
                                              -------------------------------
                                                11,623     11,622          -
                                              -------------------------------
    Operating income(1)                          6,151      3,575         72
    Operating income (%)                         34.6%      23.5%         47
    Fracturing revenue per job ($)              74,572    123,721        (40)
    Number of fracturing jobs                      147         64        130
    Coiled tubing revenue per job ($)           45,112     59,665        (24)
    Number of coiled tubing jobs                   151        122         24
    Cdn$/rouble average exchange rate(2)        0.0350     0.0429        (18)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    (2) Source: Bank of Canada.
    

Revenue

During the third quarter of 2009, the Company's revenue from Russian operations increased by 17 percent to $17.8 million from $15.2 million in the corresponding three-month period of 2008 mainly due to higher fracturing and coiled tubing activity levels being partially offset by smaller job sizes, lower annual contract pricing and the depreciation of the Russian rouble by 18 percent versus the Canadian dollar.

Operating Expenses

Operating expenses in Russia in the third quarter of 2009 were $10.7 million compared to $10.6 million in the corresponding period of 2008. The increase in operating expenses was primarily due to the higher revenue base and equipment utilization offset partially by the depreciation in the Russian rouble against the Canadian dollar.

SG&A Expenses

SG&A expenses in Russia were $0.9 million for the three-month period ended September 30, 2009 versus $1.1 million in the same quarter of 2008. The decrease was primarily due to the depreciation of the Russian rouble.

Latin America

    
    -------------------------------------------------------------------------
    Three Months Ended September 30,              2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational and
     exchange rate information)                     ($)        ($)        (%)
    (unaudited)

    Revenue                                     17,500      6,591        166
    Expenses
      Operating                                 14,328      7,454         92
      SG&A                                         617        252        145
                                              -------------------------------
                                                14,945      7,706         94
                                              -------------------------------
    Operating income (loss)(1)                   2,555     (1,115)       329
    Operating income (loss) (%)                  14.6%     -16.9%        186
    Cdn$/Mexican peso average
     exchange rate(2)                           0.0828     0.1009        (18)
    Cdn$/Argentine peso average
     exchange rate(2)                           0.2846     0.3376        (16)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    (2) Source: Bank of Canada.
    

Revenue

Calfrac's Latin America operations generated total revenue of $17.5 million during the third quarter of 2009 versus $6.6 million in the comparable three-month period in 2008. For the three months ended September 30, 2009 and 2008, revenue generated through subcontractors was $3.2 million and $2.1 million, respectively. The increase in revenue was primarily due to higher fracturing activity with the expansion of the Company's fracturing operations into the Chicontepec region during the second quarter, the completion of larger jobs in Mexico, higher cementing activity levels and larger job sizes in Argentina, combined with the commencement of cementing operations in Mexico during the third quarter of 2009, offset partially by the appreciation of the Canadian dollar versus the Mexican and Argentine peso.

Operating Expenses

Operating expenses in Latin America for the three months ended September 30, 2009 increased by 92 percent from the comparative period in 2008 to $14.3 million. This increase was primarily due to higher fracturing activity and higher product costs related to the completion of more and larger fracturing jobs in Mexico, costs related to the start-up and commencement of cementing operations in Mexico during the third quarter of 2009, combined with incremental expenses related to higher activity levels and cementing job sizes in Argentina.

SG&A Expenses

SG&A expenses in Latin America increased to $0.6 million from $0.3 milli

on in the comparable quarter of 2008 primarily due to the Company's expanded scale of operations in Mexico and Argentina.

Corporate

    
    -------------------------------------------------------------------------
    Three Months Ended September 30,              2009       2008     Change
    -------------------------------------------------------------------------
    (000s)                                          ($)        ($)        (%)
    (unaudited)

    Expenses
      Operating                                    488        686        (29)
      SG&A                                       3,491      4,049        (14)
                                              -------------------------------
                                                 3,979      4,735        (16)
    Operating loss(1)                           (3,979)    (4,735)        16
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    

Operating Expenses

Operating expenses primarily relate to manufacturing and R&D personnel located in the Corporate headquarters who directly support the Company's global field operations. The 29 percent decrease in Corporate operating expenses from the third quarter of 2008 is mainly due to lower compensation expenses as a result of a decrease in the number of personnel supporting the Company's operations and the impact of cost-saving initiatives implemented during the second quarter of 2009.

SG&A Expenses

For the three months ended September 30, 2009, Corporate SG&A expenses decreased by 14 percent from the comparable 2008 period to $3.5 million, mainly due to lower compensation expenses resulting from cost-saving measures implemented early in the second quarter of 2009, offset partially by higher stock-based compensation expenses.

Interest and Depreciation Expenses

The Company's net interest expense of $3.8 million for the third quarter of 2009 represented an increase of $1.1 million from $2.7 million in the comparable period of 2008. This increase was primarily due to higher reported interest expense related to the Company's unsecured senior notes resulting from the appreciation in the value of the United States dollar and additional interest expense related to the $59.1 million drawdown on the Company's credit facilities.

For the three months ended September 30, 2009, depreciation expense increased by 21 percent to $15.4 million from $12.8 million in the corresponding quarter of 2008, mainly as a result of the Company's acquisition of fracturing assets from Pure, a larger fleet of equipment operating in North America and the appreciation in the value of the United States dollar.

Foreign Exchange Losses or Gains

The Company incurred a foreign exchange loss of $1.8 million during the third quarter of 2009 versus $0.7 million in the comparative three-month period of 2008. Foreign exchange gains and losses arise primarily from the translation of Calfrac's international operations in Russia, Mexico and Argentina using the temporal method. On a quarter-over-quarter basis, the change in foreign exchange losses or gains was mainly due to the impact of the appreciation of the Canadian dollar on foreign assets denominated in United States dollars, Russian roubles, Mexican pesos or Argentine pesos.

Income Tax Expenses

The Company recorded an income tax recovery of $7.0 million during the third quarter of 2009 compared to income tax expense of $0.3 million in the comparable period of 2008. The effective income tax rate for the three months ended September 30, 2009 was 170 percent compared to an effective tax rate of 3 percent in the same quarter of 2008. The decrease in total income tax expense was primarily due to pre-tax losses in Canada and the United States offset partially by higher profitability in Russia, Mexico and Argentina. During the third quarter, the increase in the deferred credit balance that was recorded in the first half of the year was reversed as the Company has adjusted its estimated tax position for the full year in Canada. This resulted in an additional future income tax recovery of $5.5 million for the three months ended September 30, 2009.

    
    Summary of Quarterly Results

    -------------------------------------------------------------------------
    Three Months Ended              Dec. 31,   Mar. 31,   June 30,  Sept. 30,
                                       2007       2008       2008       2008
    -------------------------------------------------------------------------
    (000s, except per share              ($)        ($)        ($)        ($)
     and unit data)
    (unaudited)

    Financial
    Revenue                         114,450    145,627     94,657    151,650
    Operating income (loss)(1)       19,872     29,477     (1,008)    27,812
    Net income (loss)                 3,653     14,269    (15,469)    11,203
      Per share - basic                0.10       0.38      (0.41)      0.30
      Per share - diluted              0.10       0.38      (0.41)      0.30
    Funds provided by
     operations(1)                   19,582     28,790         (9)    27,128
      Per share - basic                0.53       0.77          -       0.72
      Per share - diluted              0.53       0.77          -       0.72
    EBITDA(1)                        18,790     31,047       (813)    26,983
      Per share - basic                0.51       0.83      (0.02)      0.71
      Per share - diluted              0.51       0.83      (0.02)      0.71
    Capital expenditures             12,101     14,820     19,341     18,414
    Working capital (end
     of period)                      92,156    111,989     94,056    104,700
    Shareholders' equity
     (end of period)                350,915    377,056    364,068    378,890
    -------------------------------------------------------------------------
    Operating (end of period)
    Pumping horsepower (000s)           N/A        232        255        287
    Coiled tubing units (No.)            18         18         18         18
    Cementing units (No.)                16         17         17         18
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    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Three Months Ended              Dec. 31,   Mar. 31,   June 30,  Sept. 30,
                                       2008       2009       2009       2009
    -------------------------------------------------------------------------
    (000s, except per share              ($)        ($)        ($)        ($)
     and unit data)
    (unaudited)

    Financial
    Revenue                         172,430    180,388    104,727    133,261
    Operating income (loss)(1)       25,658     27,427      4,052     16,499
    Net income (loss)                 7,861      5,528    (14,770)     2,842
      Per share - basic                0.21       0.15      (0.39)      0.08
      Per share - diluted              0.21       0.15      (0.39)      0.08
    Funds provided by
     operations(1)                   24,838     22,713        128     12,199
      Per share - basic                0.66       0.60          -       0.32
      Per share - diluted              0.66       0.60          -       0.32
    EBITDA(1)                        26,740     25,945      4,340     15,112
      Per share - basic                0.71       0.69       0.11       0.40
      Per share - diluted              0.71       0.69       0.11       0.40
    Capital expenditures             32,233     15,857      9,862     58,212
    Working capital (end
     of period)                     100,575    129,532    111,864    103,331
    Shareholders' equity
     (end of period)                393,476    402,537    380,515    378,972
    -------------------------------------------------------------------------
    Operating (end of period)
    Pumping horsepower (000s)           287        303        319        371
    Coiled tubing units (No.)            18         18         18         18
    Cementing units (No.)                18         20         20         21
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    N/A - Not Available


    Financial Overview - Nine Months Ended September 30, 2009 Versus 2008
    -------------------------------------------------------------------------

    Canada

    -------------------------------------------------------------------------
    Nine Months Ended September 30,               2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational information)          ($)        ($)        (%)
    (unaudited)

    Revenue                                    157,067    190,610        (18)
    Expenses
      Operating                                135,870    154,458        (12)
      SG&A                                       7,090      7,672         (8)
                                             --------------------------------
                                               142,960    162,130        (12)
                                             --------------------------------
    Operating income(1)                         14,107     28,480        (50)
    Operating income (%)                          9.0%      14.9%        (40)
    Fracturing revenue per job ($)              90,515     62,276         45
    Number of fracturing jobs                    1,504      2,530        (41)
    Coiled tubing revenue per job ($)           18,226      9,711         88
    Number of coiled tubing jobs                   952      2,049        (54)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    

Revenue

Revenue from Calfrac's Canadian operations during the first nine months of 2009 decreased by 18 percent to $157.1 million from $190.6 million in the comparable period of 2008. The decrease in revenue was due primarily to lower fracturing and coiled tubing activity combined with the impact of suspending the Company's primary cementing operations in April 2009 offset partially by an increase in the proportion of larger jobs completed in the unconventional resource plays located in northwest Alberta and northeast British Columbia.

Operating Expenses

Operating expenses in Canada were $135.9 million during the first nine months of 2009 versus $154.5 million in the same period of 2008. The decrease in Canadian operating expenses was mainly due to lower activity levels and the impact of cost rationalization measures offset by an increase in equipment repair expenses and $1.5 million of restructuring costs.

SG&A Expenses

SG&A expenses for Calfrac's Canadian operations were $7.1 million during the first nine months of 2009, a decrease of 8 percent from the corresponding period of 2008 due primarily to lower personnel costs.

United States

    
    -------------------------------------------------------------------------
    Nine Months Ended September 30,               2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational and
     exchange rate information)                     ($)        ($)        (%)
    (unaudited)

    Revenue                                    164,020    137,210         20
    Expenses
      Operating                                136,212     96,222         42
      SG&A                                       5,319      5,957        (11)
                                             --------------------------------
                                               141,531    102,179         39
                                             --------------------------------
    Operating income(1)                         22,489     35,031        (36)
    Operating income (%)                         13.7%      25.5%        (46)
    Fracturing revenue per job ($)              76,899     60,834         26
    Number of fracturing jobs                    1,973      2,139         (8)
    Cementing revenue per job ($)               19,998     13,296         50
    Number of cementing jobs                       615        533         15
    Cdn$/US$ average exchange rate(2)           1.1694     1.0180         15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    (2) Source: Bank of Canada.
    

Revenue

Revenue from Calfrac's United States operations increased during the first nine months of 2009 to $164.0 million from $137.2 million in the comparable period of 2008. The increase in revenue was primarily due to the impact of the 15 percent appreciation in the value of the United States dollar versus the Canadian dollar, an increase in the number of larger fracturing jobs completed in Arkansas combined with the completion of more and larger cementing jobs offset partially by competitive pricing pressures and lower fracturing activity in the Rocky Mountain region.

Operating Expenses

Operating expenses in the United States were $136.2 million for the first nine months of 2009, an increase of 42 percent from the comparative period in 2008 primarily due to the impact of the appreciation of the United States dollar against the Canadian dollar, increased usage of proppant and higher equipment repair expenses resulting from the completion of larger fracturing jobs as well as higher operating costs related to the increased scale and activity levels of the Company's cementing operations in Arkansas.

SG&A Expenses

SG&A expenses in the United States during the first nine months of 2009 decreased by 11 percent from the comparable period in 2008 to $5.3 million primarily due to lower compensation expenses, offset partially by the appreciation of the United States dollar.

Russia

    
    -------------------------------------------------------------------------
    Nine Months Ended September 30,               2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational and
     exchange rate information)                     ($)        ($)        (%)
    (unaudited)

    Revenue                                     51,932     45,131         15
    Expenses
      Operating                                 33,364     34,037         (2)
      SG&A                                       2,648      2,780         (5)
                                             --------------------------------
                                                36,012     36,817         (2)
                                             --------------------------------
    Operating income(1)                         15,920      8,314         91
    Operating income (%)                         30.7%      18.4%         67
    Fracturing revenue per job ($)              75,430    133,541        (44)
    Number of fracturing jobs                      438        185        137
    Coiled tubing revenue per job ($)           45,418     62,086        (27)
    Number of coiled tubing jobs                   416        329         26
    Cdn$/rouble average exchange rate(2)        0.0360     0.0424        (15)
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    (2) Source: Bank of Canada.
    

Revenue

During the first nine months of 2009, the Company's revenue from Russian operations increased by 15 percent to $51.9 million from $45.1 million in the corresponding nine-month period of 2008. Total revenue during the first nine months of 2009 was higher than in the comparative nine-month period in 2008 primarily due to higher fracturing and coiled tubing activity being partially offset by smaller job sizes, lower annual contract pricing and the depreciation of the Russian rouble by 15 percent against the Canadian dollar.

Operating Expenses

Operating expenses in Russia in the first nine months of 2009 were $33.4 million compared to $34.0 million in the corresponding period of 2008. The decrease in operating expenses was primarily due to the depreciation in the Russian rouble against the Canadian dollar, offset partially by higher fracturing and coiled tubing activity.

SG&A Expenses

SG&A expenses in Russia were $2.6 million for the nine-month period ended September 30, 2009 versus $2.8 million in the same period of 2008. The slight decrease in SG&A expenses was primarily due to the depreciation of the Russian rouble, offset partially by higher occupancy costs.

Latin America

    
    -------------------------------------------------------------------------
    Nine Months Ended September 30,               2009       2008     Change
    -------------------------------------------------------------------------
    (000s, except operational and
     exchange rate information)                     ($)        ($)        (%)
    (unaudited)

    Revenue                                     45,357     18,982        139
    Expenses
      Operating                                 35,658     20,860         71
      SG&A                                       1,685        594        184
                                             --------------------------------
                                                37,343     21,454         74
                                             --------------------------------
    Operating income (loss)(1)                   8,014     (2,472)       424
    Operating income (loss) (%)                  17.7%     -13.0%        236
    Cdn$/Mexican peso average
     exchange rate(2)                           0.0857     0.0969        (12)
    Cdn$/Argentine peso average
     exchange rate(2)                           0.3124     0.3237         (3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    (2) Source: Bank of Canada.
    

Revenue

Calfrac's Latin America operations generated total revenue of $45.4 million during the first nine months of 2009 versus $19.0 million in the comparable nine-month period in 2008. For the nine months ended September 30, 2009 and 2008, revenue generated through subcontractors was $9.3 million and $7.2 million, respectively. The increase in revenue was primarily due to higher fracturing activity and larger job sizes in Mexico, higher cementing activity in Argentina as these operations commenced during the second quarter of 2008 and the commencement of cementing operations in Mexico during the third quarter of 2009 offset partially by the 12 percent decline in the Mexican peso versus the Canadian dollar.

Operating Expenses

Operating expenses in Latin America for the nine months ended September 30, 2009 increased by 71 percent from the comparative period in 2008 to $35.7 million. This increase was primarily due to a higher revenue base from a full quarter of fracturing operations in the Chicontepec region plus increased product costs in Mexico related to the completion of larger fracturing jobs, incremental expenses related to the Company's operations in Argentina which began during the second quarter of 2008 combined with start-up and incremental operating expenses related to the commencement of cementing operations in Mexico during the third quarter of 2009. These factors were partially offset by the depreciation of the Mexican peso.

SG&A Expenses

SG&A expenses in Latin America increased by $1.1 million from the comparable period of 2008 to $1.7 million in the first nine months of 2009 primarily due to the Company's expanded scale of operations in Mexico and Argentina, offset partially by the depreciation of the Mexican peso against the Canadian dollar.

Corporate

    
    -------------------------------------------------------------------------
    Nine Months Ended September 30,               2009       2008     Change
    -------------------------------------------------------------------------
    (000s)                                          ($)        ($)        (%)
    (unaudited)

    Expenses
      Operating                                  1,898      1,774          7
      SG&A                                      10,654     11,298         (6)
                                             --------------------------------
                                                12,552     13,072         (4)
    Operating loss(1)                          (12,552)   (13,072)         4
    -------------------------------------------------------------------------
    (1) Refer to "Non-GAAP Measures" on page 15 for further information.
    

Operating Expenses

Operating expenses primarily relate to manufacturing and R&D personnel located in the Corporate headquarters who directly support the Company's global field operations. The 7 percent increase in Corporate operating expenses from the first nine months of 2008 is mainly due to an increase in the number of personnel directly supporting the Company's broader scale of operations.

SG&A Expenses

For the nine months ended September 30, 2009, Corporate SG&A expenses decreased by 6 percent to $10.7 million, mainly due to lower compensation expenses arising from restructuring initiatives implemented early in the second quarter, offset slightly by higher stock-based compensation expenses.

Interest and Depreciation Expenses

The Company's net interest expense of $11.0 million for the first nine months of 2009 represented an increase of $2.9 million from $8.1 million in the comparable period of 2008. This increase was primarily due to higher reported interest expense related to the Company's unsecured senior notes resulting from the appreciation in the value of the United States dollar and additional interest expense related to the drawdown on the Company's revolving term credit facilities.

For the nine months ended September 30, 2009, depreciation expense increased by 24 percent to $45.6 million from $36.9 million in the corresponding period of 2008, mainly as a result of the Company's larger fleet of equipment operating in North America, the acquisition of fracturing assets from Pure and the appreciation in the value of the United States dollar.

Foreign Exchange Losses or Gains

The Company incurred a foreign exchange loss of $3.9 million during the first nine months of 2009 versus a foreign exchange gain of $0.8 million in the comparative nine-month period of 2008. Foreign exchange gains and losses arise primarily from the translation of Calfrac's international operations in Russia, Mexico and Argentina using the temporal method. The change from a foreign exchange gain to a loss was mainly due to the appreciation of the Canadian dollar on foreign assets denominated in United States dollars, Russian roubles, Mexican pesos or Argentine pesos.

Income Tax Expenses

The Company recorded income tax recovery of $4.8 million during the first nine months of 2009 versus income tax expense of $2.4 million during the comparable period of 2008. The effective income tax rate for the nine months ended September 30, 2009 was 43 percent compared to an effective tax rate of 20 percent in the same period of 2008. The change in the effective income tax rate period-over-period is due to the change in the mix of taxable earnings and losses incurred in the countries in which the Company operates and the differing rates of income tax attributable to those earnings and losses. In addition, Canadian losses for 2009 are being recovered at full statutory rates, however, the provision for income taxes on Canadian income in 2008 was tax affected at a significantly lower effective rate due to the offsetting impact of drawing down the deferred credit.

    
    Liquidity and Capital Resources
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                    Three Months Ended     Nine Months Ended
                                              Sept. 30,             Sept. 30,
    -------------------------------------------------------------------------
                                       2009       2008       2009       2008
    -------------------------------------------------------------------------
    (000s)                               ($)        ($)        ($)        ($)
    (unaudited)
    Cash provided by (used in):
      Operating activities          (11,721)    (1,830)    25,290     27,124
      Financing activities           32,483        216     45,596      6,991
      Investing activities          (56,080)   (20,012)   (89,066)   (53,899)
      Effect of exchange rate
       changes on cash and
       cash equivalents              (4,184)     1,851     (7,690)     3,421
    -------------------------------------------------------------------------
    Decrease in cash and cash
     equivalents                    (39,502)   (19,775)   (25,870)   (16,363)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Operating Activities

The Company's cash flow from operating activities for the nine months ended September 30, 2009 was $25.3 million versus $27.1 million in the comparable period in 2008. The change was primarily due to a $19.0 million net change in non-cash working capital that was more than offset by a $20.9 million reduction in funds provided by operations (refer to "Non-GAAP Measures" on page 15). At September 30, 2009, Calfrac's working capital was approximately $103.3 million, a decrease of 1 percent from September 30, 2008. The Company reviewed its quarter-end accounts receivable balance in detail and determined that a provision for doubtful accounts receivable totalling $1.0 million was adequate. The majority of this provision related to a customer that filed for Chapter 11 restructuring under United States bankruptcy law.

Financing Activities

Net cash provided by financing activities for the first nine months of 2009 was $45.6 million compared to $7.0 million in the comparable period of 2008 as the Company drew $59.1 million on its revolving term credit facility, repaid $15.0 million on its operating line of credit and assumed a $3.3 million mortgage as a result of the acquisition of Pure's fracturing assets during the first nine months of 2009. In addition, Calfrac received proceeds of $8.9 million from the issuance of common shares during the first nine months of 2008 and no such amounts in the same period of 2009.

In February 2007, Calfrac completed a private placement of senior unsecured notes for an aggregate principal amount of US$135.0 million. These notes are due on February 15, 2015 and bear interest at 7.75 percent per annum.

On September 29, 2009, the Company increased its credit facilities from $90.0 million to $170.0 million with a syndicate of Canadian chartered banks. It consists of an operating facility of $10.0 million, a syndicated facility of $125.0 million and an incremental facility of $35.0 million, which is available upon closing of the Century acquisition for a period of approximately six months thereafter subject to extension at the lender's discretion. The terms of the renewed credit facility are based upon parameters of certain bank covenants and range from prime plus 1 percent to prime plus 1.75 percent. As of September 30, 2009, the Company had drawn $62.1 million on its syndicated facility, leaving a further $107.9 million in immediately available credit, including a $35.0 million incremental facility available upon the closing of the Century acquisition for a period of approximately six months thereafter, should these funds be required.

At September 30, 2009, the Company had cash and cash equivalents of $10.6 million. A portion of these funds was invested in short-term investments, which consisted primarily of an overnight money market fund and is not exposed to any liquidity issues.

The Company pays semi-annual dividends to shareholders of $0.05 per common share at the discretion of the Board of Directors, which qualify as "eligible dividends" as defined by the Canada Revenue Agency. These dividends are funded by funds provided by operations and totalled $1.9 million in each of the first nine months of 2009 and 2008.

Investing Activities

For the first nine months of 2009, Calfrac's net cash used for investing activities was $89.1 million versus $53.9 million for the same period of 2008. Capital expenditures were $83.9 million in the first nine months of 2009 compared to $52.6 million in the same period of 2008. Capital expenditures in 2009 included the acquisition of fracturing assets of Pure during the third quarter of 2009 for $42.3 million and the remaining capital expenditures were primarily related to increasing the pumping capacity of the Company's fracturing equipment fleet throughout North America.

On January 11, 2008, the Company acquired the remaining 70 percent of the common shares of ChemErgy Ltd. that it did not previously own for aggregate consideration of approximately $6.6 million. The purchase price was satisfied through the payment to the vendors of approximately $4.8 million in cash, the transfer of real property at a value of approximately $0.5 million and the issuance of 71,581 common shares of the Company with a value of approximately $1.3 million.

On January 4, 2008, the Company acquired all the shares of 1368303 Alberta Ltd. from a Canadian competitor for cash and share consideration totalling approximately $2.7 million. The Company issued 78,579 common shares with a value of approximately $1.3 million in conjunction with the acquisition, in addition to approximately $1.4 million of cash. All of the consideration paid was assigned to capital assets, as the acquired company had no assets or liabilities other than fracturing equipment.

Additionally, net cash used for investing activities was impacted by the net change in non-cash working capital from the purchase of capital assets.

The effect of changes in foreign exchange rates on the Company's cash and cash equivalents during the first nine months of 2009 was a loss of $7.7 million versus a gain of $3.4 million during the same period of 2008. These gains relate to cash and cash equivalents held by the Company in a foreign currency.

With its strong working capital position, credit facilities and anticipated funds provided by operations, the Company expects to have adequate resources to fund its financial obligations and planned capital expenditures for 2009 and beyond.

Proposed Acquisition

On September 20, 2009, the Company and Century entered into a definitive agreement pursuant to which the Company will acquire all of the issued and outstanding common shares of Century, a privately held fracturing services company operating in Western Canada. Under the terms of the agreement, the purchase price of $90.0 million will consist of approximately $13.5 million of cash plus up to 5,144,695 common shares of the Company, with an agreed value of $76.5 million. For accounting purposes, the shares issuable in the transaction have a fair value of approximately $82.2 million based on the weighted average price of the Company's shares for the three trading days preceding and the three days following the date of the agreement. The fair value of the share consideration for accounting purposes is calculated on a different basis than the agreed value and results in a higher recorded purchase price. Including estimated transaction costs, the total consideration will be approximately $99.5 million for accounting purposes. If approved by the shareholders of Century, the acquisition is expected to close on or after November 10, 2009.

Outstanding Share Data

The Company is authorized to issue an unlimited number of common shares. Employees have been granted options to purchase common shares under the Company's shareholder-approved stock option plan. The number of shares reserved for issuance under the stock option plan is equal to 10 percent of the Company's issued and outstanding common shares. As at October 31, 2009, there were 37,742,186 common shares issued and outstanding, and 2,537,978 options to purchase common shares.

    
    Advisories
    -------------------------------------------------------------------------
    

Forward-Looking Statements

In order to provide Calfrac shareholders and potential investors with information regarding the Company and its subsidiaries, including management's assessment of Calfrac's plans and future operations, certain statements contained in this press release, including statements that contain words such as "anticipates", "can", "may", "expect", "believe", "intend", "forecast", "will", or similar words suggesting future outcomes, are forward-looking statements. Forward-looking statements in this document include, but are not limited to, statements with respect to future capital expenditures, future financial resources, future oil and natural gas well activity, outcome of specific events, trends in the oil and natural gas industry and the Company's growth prospects including, without limitation, its international growth strategy and prospects. These statements are derived from certain assumptions and analyses made by the Company based on its experience and interpretation of historical trends, current conditions, expected future developments and other factors that it believes are appropriate in the circumstances, including assumptions related to commodity pricing, North American drilling activity and the expectation that access to capital will continue to be restricted for many of Calfrac's customers. Forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from the Company's expectations. The most significant risk factors to Calfrac relate to prevailing economic conditions; commodity prices; sourcing, pricing and availability of raw materials, component parts, equipment, suppliers, facilities and skilled personnel; dependence on major customers; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; and regional competition. Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Further information about these risks and uncertainties may be found under "Business Risks" below.

Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and there can be no assurance that actual results or developments anticipated by the Company will be realized, or that they will have the expected consequences or effects on the Company or its business or operations. The Company assumes no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise, except as required pursuant to applicable securities laws.

Business Risks

The business of Calfrac is subject to certain risks and uncertainties. Prior to making any investment decision regarding Calfrac, investors should carefully consider, among other things, the risk factors set forth in the Company's most recently filed Annual Information Form and incorporated by reference herein.

The Annual Information Form is available through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR), which can be accessed at www.sedar.com. Copies of the Annual Information Form may also be obtained on request without charge from Calfrac at 411 - 8th Avenue S.W., Calgary, Alberta T2P 1E3, or at www.calfrac.com, or by facsimile at 403-266-7381.

Non-GAAP Measures

Certain measures in this press release do not have any standardized meaning as prescribed under Canadian GAAP and are therefore considered non-GAAP measures. These measures include operating income, funds provided by operations and EBITDA. These measures may not be comparable to similar measures presented by other entities. These measures have been described and presented in this press release in order to provide shareholders and potential investors with additional information regarding the Company's financial results, liquidity and its ability to generate funds to finance its operations. Management's use of these measures has been disclosed further in this press release as these measures are discussed and presented.

Additional Information

Further information regarding Calfrac Well Services Ltd., including the most recently filed Annual Information Form, can be accessed on the Company's website at www.calfrac.com or under the Company's public filings found at www.sedar.com.

Third Quarter Conference Call

Calfrac will be conducting a conference call for interested analysts, brokers, investors and news media representatives to review its 2009 third quarter results at 10:00 a.m. (Mountain Time) on Thursday, November 5, 2009. The conference call dial-in number is 1-877-974-0447 or 416-644-3433. The seven-day replay numbers are 1-877-289-8525 or 416-640-1917 (once connected, enter 4177961 followed by the number sign). A webcast of the conference call may be accessed via the Company's website at www.calfrac.com.

    
    CONSOLIDATED BALANCE SHEETS
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    As at                                              September    December
                                                        30, 2009    31, 2008
    -------------------------------------------------------------------------
    (000s) (unaudited)                                        ($)         ($)

    ASSETS
    Current assets
      Cash and cash equivalents                           10,622      36,492
      Accounts receivable                                118,647     120,048
      Income taxes recoverable                             1,810       6,681
      Inventory                                           37,545      41,123
      Prepaid expenses and deposits                        7,033       5,813
    -------------------------------------------------------------------------
                                                         175,657     210,157
    Capital assets                                       473,656     459,874
    Goodwill                                              10,523      10,523
    Future income taxes                                   18,384      11,218
    -------------------------------------------------------------------------
                                                         678,220     691,772
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
      Accounts payable and accrued liabilities            69,020      94,582
      Bank loan                                                -      15,000
      Current portion of long-term debt (note 5)           3,306           -
    -------------------------------------------------------------------------
                                                          72,326     109,582
    Long-term debt (note 5)                              200,168     159,899
    Other long-term liabilities                            1,282       1,368
    Future income taxes                                   22,212      24,815
    Deferred credit                                        3,105       2,588
    Non-controlling interest                                 155          44
    -------------------------------------------------------------------------
                                                         299,248     298,296
    -------------------------------------------------------------------------
    Shareholders' equity
    Capital stock (note 6)                               168,813     168,813
    Contributed surplus (note 7)                           9,914       7,297
    Retained earnings                                    203,365     211,652
    Accumulated other comprehensive income (loss)         (3,120)      5,714
    -------------------------------------------------------------------------
                                                         378,972     393,476
    -------------------------------------------------------------------------
                                                         678,220     691,772
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Contingencies (note 10)

    See accompanying notes to the consolidated financial statements.



    CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                  Three Months Ended       Nine Months Ended
                                            Sept. 30,               Sept. 30,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    (000s, except per share data)     ($)         ($)         ($)         ($)
     (unaudited)

    Revenue                      133,261     151,650     418,376     391,933
    -------------------------------------------------------------------------
    Expenses
      Operating                  108,028     113,229     343,001     307,349
      Selling, general and
       administrative              8,734      10,609      27,397      28,303
      Depreciation                15,448      12,773      45,563      36,868
      Interest, net                3,763       2,692      10,951       8,072
      Equity share of income from
       long-term investments           -           -           -        (122)
      Foreign exchange losses
       (gains)                     1,807         704       3,902        (805)
      Loss (gain) on disposal of
       capital assets               (420)        125      (1,321)         (8)
    -------------------------------------------------------------------------
                                 137,360     140,132     429,493     379,657
    -------------------------------------------------------------------------
    Income (loss) before income
     taxes and non-controlling
     interest                     (4,099)     11,518     (11,117)     12,276
    -------------------------------------------------------------------------
    Income taxes
      Current                       (227)     (1,426)      1,234      (3,848)
      Future                      (6,745)      1,769      (6,062)      6,243
    -------------------------------------------------------------------------
                                  (6,972)        343      (4,828)      2,395
    -------------------------------------------------------------------------
    Income (loss) before
     non-controlling interest      2,873      11,175      (6,289)      9,881
    Non-controlling interest          31         (28)        111        (122)
    -------------------------------------------------------------------------
    Net income (loss) for the
     period                        2,842      11,203      (6,400)     10,003
    Retained earnings, beginning
     of period                   200,523     194,947     211,652     198,039
    Dividends                          -           -      (1,887)     (1,892)
    -------------------------------------------------------------------------
    Retained earnings, end
     of period                   203,365     206,150     203,365     206,150
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Income (loss) per share
      Basic                         0.08        0.30       (0.17)       0.27
      Diluted                       0.08        0.30       (0.17)       0.27
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the consolidated financial statements.



    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND ACCUMULATED
    OTHER COMPREHENSIVE INCOME
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                  Three Months Ended       Nine Months Ended
                                            Sept. 30,               Sept. 30,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    (000s) (unaudited)                ($)         ($)         ($)         ($)

    Net income (loss) for
     the period                    2,842      11,203      (6,400)     10,003
    Other comprehensive
     income (loss)
      Change in foreign currency
       translation adjustment     (5,260)      2,276      (8,834)      3,563
    -------------------------------------------------------------------------
    Comprehensive income (loss)   (2,418)     13,479     (15,234)     13,566
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated other
     comprehensive income (loss),
     beginning of period           2,140      (4,917)      5,714      (6,204)
      Other comprehensive income
       (loss) for the period      (5,260)      2,276      (8,834)      3,563
    -------------------------------------------------------------------------
    Accumulated other
     comprehensive income (loss),
     end of period                (3,120)     (2,641)     (3,120)     (2,641)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the consolidated financial statements.



    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                  Three Months Ended       Nine Months Ended
                                            Sept. 30,               Sept. 30,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    (000s) (unaudited)                ($)         ($)         ($)         ($)

    CASH PROVIDED BY (USED IN)
     OPERATING ACTIVITIES
      Net income (loss) for the
       period                      2,842      11,203      (6,400)     10,003
      Items not involving cash
        Depreciation              15,448      12,773      45,563      36,868
        Amortization of debt
         issue costs                 168         159         532         464
        Stock-based compensation     875       1,127       2,617       2,583
        Equity share of income
         from long-term investments    -           -           -        (122)
        Loss (gain) on disposal
         of capital assets          (420)        125      (1,321)         (8)
        Future income taxes       (6,745)      1,769      (6,062)      6,243
        Non-controlling interest      31         (28)        111        (122)
    -------------------------------------------------------------------------
                                  12,199      27,128      35,040      55,909
      Net change in non-cash
       operating assets and
       liabilities               (23,920)    (28,958)     (9,750)    (28,785)
    -------------------------------------------------------------------------
                                 (11,721)     (1,830)     25,290      27,124
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
      Bank loan proceeds               -           -       5,000           -
      Issuance of long-term
       debt                       42,541           -      62,541           -
      Bank loan repayments       (10,000)          -     (20,000)          -
      Long-term debt repayments      (58)          -         (58)          -
      Net proceeds on issuance
       of common shares                -         216           -       8,883
      Dividends                        -           -      (1,887)     (1,892)
    -------------------------------------------------------------------------
                                  32,483         216      45,596       6,991
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
      Purchase of capital
       assets (note 4)           (58,212)    (18,414)    (83,931)    (52,574)
      Proceeds on disposal of
       capital assets                959          28       2,133         285
      Acquisitions, net of
       cash acquired                   -           -           -      (6,117)
      Long-term investments
       and other                       -          83           -         326
      Net change in non-cash
       working capital from
       purchase of capital assets  1,173      (1,709)     (7,268)      4,181
    -------------------------------------------------------------------------
                                 (56,080)    (20,012)    (89,066)    (53,899)
    -------------------------------------------------------------------------
    Effect of exchange rate
     changes on cash and cash
     equivalents                  (4,184)      1,851      (7,690)      3,421
    -------------------------------------------------------------------------
    Increase (decrease) in
     cash position               (39,502)    (19,775)    (25,870)    (16,363)
    Cash and cash equivalents,
     beginning of period          50,124      42,516      36,492      39,104
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                10,622      22,741      10,622      22,741
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the consolidated financial statements.



    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    -------------------------------------------------------------------------

    FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009

    (figures in text and tables are in 000s except share data and certain
    other exceptions as indicated) (unaudited)

    1.  BASIS OF PRESENTATION

        The interim financial statements of Calfrac Well Services Ltd. (the
        "Company") do not conform in all respects to the requirements of
        generally accepted accounting principles (GAAP) for annual financial
        statements. The interim financial statements should be read in
        conjunction with the most recent annual financial statements.

    2.  SEASONALITY OF OPERATIONS

        The Company's Canadian business is seasonal in nature. The lowest
        activity levels are typically experienced during the second quarter
        of the year when road weight restrictions are in place and access to
        wellsites in Canada is reduced.

    3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        (a) The interim financial statements follow the same accounting
            policies and methods of application as the most recent annual
            financial statements, except for the adoption of the Canadian
            Institute of Chartered Accountants (CICA) Handbook Section 3064
            Goodwill and Intangible Assets. Section 3064 replaces the
            previous Section 3062 and establishes standards for the
            recognition, measurement, presentation and disclosure of
            intangible assets and goodwill subsequent to its initial
            recognition. The adoption of Section 3064 has not had an impact
            on the Company's consolidated financial statements, as the
            provisions relating to goodwill are unchanged from the previous
            standard and the Company has no recognizable intangible assets.

        (b) In 2006, the CICA Accounting Standards Board (AcSB) adopted a
            strategic plan for the direction of accounting standards in
            Canada. As part of that plan, the AcSB confirmed in February 2008
            that International Financial Reporting Standards (IFRS) will
            replace Canadian GAAP in 2011 for profit-oriented Canadian
            publicly accountable enterprises. As the Company will be required
            to report its results in accordance with IFRS starting in 2011,
            the Company has developed its project plan which includes the
            following key elements:

            -    determine appropriate changes to accounting policies and
                 required amendments to financial disclosures;

            -    identify and implement changes in associated processes and
                 information systems;

            -    comply with internal control requirements; and

            -    educate and train internal and external stakeholders.

            The Company is currently analysing accounting policy alternatives
            and identifying implementation options for the areas that have
            been identified as having the greatest potential impact to the
            Company's financial statements or the greatest risk in terms of
            complexity to implement. The areas identified to date include
            capital assets, impairment and foreign currency translation.

    4.  ASSET ACQUISITION

        On August 14, 2009, the Company purchased the fracturing assets of a
        competitor for $44,513 including related transaction costs. The
        Company acquired $42,252 of capital assets including fracturing
        equipment and certain real property, as well as $2,261 of the
        vendor's parts and materials inventory. The purchase price was
        satisfied through payment of $41,071 in cash and the assumption of
        long-term debt in the amount of $3,442.

    5.  LONG-TERM DEBT

        ---------------------------------------------------------------------
        As at                                          September    December
                                                        30, 2009    31, 2008
        ---------------------------------------------------------------------
        (000s)                                                ($)         ($)

        US$135,000 senior unsecured notes, due
         February 15, 2015 bearing interest at 7.75%,
         payable semi-annually                           144,545     164,430
        Less: unamortized debt issue costs                (3,496)     (4,531)
        ---------------------------------------------------------------------
                                                         141,049     159,899
        $125,000 extendible revolving term loan facility
         currently bearing interest at the Canadian prime
         rate plus 1%, secured by the Canadian and U.S.
         assets of the Company                            59,099           -
        US$3,107 mortgage bearing interest at U.S. prime
         less 1%, repayable $35 per month principal and
         interest, secured by certain real property        3,326           -
        ---------------------------------------------------------------------
                                                         203,474     159,899
        Less: current portion of long-term debt           (3,306)          -
        ---------------------------------------------------------------------
                                                         200,168     159,899
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The fair value of the senior unsecured notes based on the closing
        price at September 30, 2009 was $140,035 (December 31, 2008 -
        $77,282).

        The interest rate on the term revolving facility is based upon the
        parameters of certain bank covenants, and range from prime plus 1% to
        prime plus 1.75%. The facility is repayable in 8 equal quarterly
        principal instalments of $2,955 commencing September 30, 2010 plus a
        final payment of $35,459 on September 28, 2012, assuming the facility
        is not extended. The term and commencement of principal repayments
        under the facility may be extended by one year on each anniversary at
        the request of the Company and acceptance by the lenders. The Company
        also has the ability to prepay principal without penalty.

    6.  CAPITAL STOCK

        Authorized capital stock consists of an unlimited number of common
        shares.


        ---------------------------------------------------------------------
        Continuity of Common
         Shares (year-to-date)           2009                    2008
        ---------------------------------------------------------------------
                                  Shares      Amount      Shares      Amount
        ---------------------------------------------------------------------
                                    (No.)     ($000s)       (No.)     ($000s)

        Balance, January 1    37,741,561     168,813  37,201,872     155,254
        Issued upon exercise
         of stock options              -           -     492,311      11,379
        Issued on acquisitions         -           -     150,160       2,640
        Purchased under Normal
         Course Issuer Bid             -           -           -           -
        ---------------------------------------------------------------------
        Balance, September 30 37,741,561     168,813  37,844,343     169,273
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The weighted average number of common shares outstanding for the nine
        months ended September 30, 2009 was 37,741,561 basic and 37,741,561
        diluted (nine months ended September 30, 2008 - 37,653,459 basic and
        37,681,393 diluted). The difference between basic and diluted shares
        for the nine months ended September 30, 2008 was attributable to the
        dilutive effect of stock options issued by the Company and shares
        held in trust. All of the outstanding options disclosed in note 8
        could be potentially dilutive in the future; however they were not
        included in the calculation of diluted shares for the nine months
        ended September 30, 2009, as they would have an anti-dilutive effect.

    7.  CONTRIBUTED SURPLUS

        ---------------------------------------------------------------------
        Continuity of Contributed Surplus
         (year-to-date)                                     2009        2008
        ---------------------------------------------------------------------
        (000s)                                                ($)         ($)

        Balance, January 1                                 7,297       6,025
          Stock options expensed                           2,617       2,583
          Stock options exercised                              -      (2,496)
        ---------------------------------------------------------------------
        Balance, September 30                              9,914       6,112
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    8.  STOCK OPTIONS

        ---------------------------------------------------------------------
        Continuity of Stock Options
         (year-to-date)                  2009                    2008
        ---------------------------------------------------------------------
                                             Average                 Average
                                            Exercise                Exercise
                                 Options       Price     Options       Price
        ---------------------------------------------------------------------
                                    (No.)         ($)       (No.)         ($)

        Balance, January 1     2,043,344       21.69   1,224,223       22.90
          Granted during the
           period                852,500        8.45   1,328,000       19.91
          Exercised for common
           shares                      -           -    (492,311)      18.04
          Forfeited             (191,049)      19.86     (74,269)      23.81
          Expired               (164,400)      32.59           -           -
        ---------------------------------------------------------------------
        Balance, September 30  2,540,395       16.68   1,985,643       22.07
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Stock options vest equally over three or four years and expire three-
        and-one-half or five years from the date of grant. The exercise price
        of outstanding options ranges from $8.35 to $29.79 with a weighted
        average remaining life of 3.30 years. When stock options are
        exercised the proceeds, together with the amount of compensation
        expense previously recorded in contributed surplus, are added to
        capital stock.

    9.  CAPITAL STRUCTURE

        The Company's capital structure is comprised of shareholders' equity
        and long-term debt. The Company's objectives in managing capital are
        (i) to maintain flexibility so as to preserve the Company's access to
        capital markets and its ability to meet its financial obligations,
        and (ii) to finance growth, including potential acquisitions.

        The Company manages its capital structure and makes adjustments in
        light of changing market conditions and new opportunities, while
        remaining cognizant of the cyclical nature of the oilfield services
        sector. To maintain or adjust its capital structure, the Company may
        revise its capital spending, adjust dividends paid to shareholders,
        issue new shares or new debt or repay existing debt.

        The Company monitors its capital structure and financing requirements
        using, amongst other parameters, the ratio of long-term debt to cash
        flow. Cash flow for this purpose is defined as cash provided by
        operating activities before the net change in non-cash operating
        assets and liabilities as reflected in the consolidated statement of
        cash flows. The ratio of long-term debt to cash flow does not have
        any standardized meaning prescribed under GAAP and may not be
        comparable to similar measures used by other companies.

        At September 30, 2009, the long-term debt to cash flow ratio was
        3.40:1 (December 31, 2008 - 1.98:1) calculated on a 12-month trailing
        basis as follows:

        ---------------------------------------------------------------------
        As at                                          September    December
                                                        30, 2009    31, 2008
        ---------------------------------------------------------------------
        (000s)                                                ($)         ($)

        Long-term debt (net of unamortized debt
         issue costs) (note 5)                           203,474     159,899
        Cash flow                                         59,878      80,747
        ---------------------------------------------------------------------
        Long-term debt to cash flow ratio                   3.40        1.98
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The Company is subject to certain financial covenants relating to
        working capital, leverage and the generation of cash flow in respect
        of its operating and revolving credit facilities. These covenants are
        monitored on a monthly basis. The Company is in compliance with all
        such covenants.

        The Company's capital management objectives, evaluation measures and
        targets have remained unchanged over the periods presented.

    10. CONTINGENCIES

        Greek Operations

        As a result of the acquisition and amalgamation with Denison Energy
        Inc. ("Denison") in 2004, the Company assumed certain legal
        obligations relating to Denison's Greek operations.

        In 1998, North Aegean Petroleum Company E.P.E. ("NAPC"), a Greek
        subsidiary of a consortium in which Denison participated (and which
        is now a majority-owned subsidiary of the Company), terminated
        employees in Greece as a result of the cessation of its oil and gas
        operations in that country. Several groups of former employees have
        filed claims against NAPC and the consortium alleging that their
        termination was invalid and that their severance pay was improperly
        determined.

        In 1999, the largest group of plaintiffs received a ruling from the
        Athens Court of First Instance that their termination was invalid and
        that salaries in arrears amounting to approximately
        $10,672 ((euro)6,846 euros) plus interest was due to the former
        employees. This decision was appealed to the Athens Court of Appeal,
        which allowed the appeal in 2001 and annulled the above-mentioned
        decision of the Athens Court of First Instance. The said group of
        former employees filed an appeal with the Supreme Court of Greece,
        which was heard on May 29, 2007. The Supreme Court of Greece allowed
        the appeal and sent the matter back to the Athens Court of Appeal for
        the consideration of the quantum of awardable salaries in arrears. On
        June 3, 2008, the Athens Court of Appeal rejected NAPC's appeal of
        the Supreme Court of Greece's decision, and reinstated the award of
        the Athens Court of First Instance, which decision has been further
        appealed to the Supreme Court of Greece, and on November 3, 2009 was
        postponed until March 16, 2010. Counsel to NAPC has obtained a
        judicial order entitling NAPC to obtain certain employment
        information in respect of the plaintiffs which is required in order
        to assess the extent to which the plaintiffs have mitigated any
        damages which may otherwise be payable. NAPC intends to vigorously
        defend the appeal decision before the Supreme Court of Greece both in
        relation to the merits of the plaintiffs' case as well as in respect
        of the quantum of any damages which may be awarded. In the event that
        an adverse ruling is issued by the Supreme Court of Greece, NAPC and
        the Company intend to assess available rights of appeal to any other
        levels of court in any jurisdiction where such an appeal is
        warranted.

        Several other smaller groups of former employees have filed similar
        cases in various courts in Greece. One of these cases was heard by
        the Athens Court of First Instance on January 18, 2007. By judgment
        rendered November 23, 2007, the plaintiff's allegations were
        partially accepted, and the plaintiff was awarded compensation for
        additional work of approximately $55 ((euro)35 euros), plus interest.
        The appeal of this decision was heard on June 2, 2009, at which time
        an additional claim by the plaintiff seeking damages of
        $348 ((euro)223 euros), plus interest, was also heard. A decision in
        respect of the hearing has been rendered which accepted NAPC's appeal
        and rejected the additional claim of the plaintiff. Another one of
        the lawsuits seeking salaries in arrears of
        $200 ((euro)128 euros), plus interest, was heard by the Supreme Court
        of Greece on November 6, 2007, at which date the appeal of the
        plaintiffs was denied for technical reasons due to improper service.
        A rehearing of this appeal scheduled for September 22, 2009 was
        postponed until September 21, 2010. The remaining action, which is
        seeking salaries in arrears of approximately $684 ((euro)439 euros)
        plus interest, was scheduled to be heard before the Athens Court of
        First Instance on October 1, 2009, but was adjourned as a result of
        the recently held Greek elections. No date has been set for the
        adjourned hearing.

        The direction and financial consequences of the potential decisions
        in these actions cannot be determined at this time and, consequently,
        no provision has been recorded in these financial statements.

    11. COMPARATIVES

        Certain comparatives have been reclassified to conform with the
        financial statement presentation adopted in the current period.

    12. SEGMENTED INFORMATION

        The Company's activities are conducted in four geographic segments:
        Canada, Russia, the United States and Latin America. All activities
        are related to fracturing, coiled tubing, cementing and well
        stimulation services for the oil and natural gas industry.


        ---------------------------------------------------------------------
                                                                      United
                                              Canada      Russia      States
        ---------------------------------------------------------------------
        (000s)                                    ($)         ($)         ($)
        ---------------------------------------------------------------------

        Three Months Ended September 30, 2009
        Revenue                               45,463      17,774      52,524
        Operating income (loss)(1)             6,090       6,151       5,682
        Segmented assets                     279,055     102,802     249,103
        Capital expenditures                  11,317       1,699      44,099
        Goodwill                               7,236         979       2,308
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Three Months Ended September 30, 2008
        Revenue                               75,294      15,197      54,568
        Operating income (loss)(1)            16,688       3,575      13,399
        Segmented assets                     272,741     107,577     217,492
        Capital expenditures                   6,133         861      10,961
        Goodwill                               7,236         979       2,308
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Nine Months Ended September 30, 2009
        Revenue                              157,067      51,932     164,020
        Operating income (loss)(1)            14,107      15,920      22,489
        Segmented assets                     279,055     102,802     249,103
        Capital expenditures                  23,709       3,135      54,890
        Goodwill                               7,236         979       2,308
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Nine Months Ended September 30, 2008
        Revenue                              190,610      45,131     137,210
        Operating income (loss)(1)            28,480       8,314      35,031
        Segmented assets                     272,741     107,577     217,492
        Capital expenditures                  17,243       1,747      30,305
        Goodwill                               7,236         979       2,308
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------



        ---------------------------------------------------------------------
                                               Latin                  Consol-
                                             America   Corporate      idated
        ---------------------------------------------------------------------
        (000s)                                    ($)         ($)         ($)
        ---------------------------------------------------------------------

        Three Months Ended September 30, 2009
        Revenue                               17,500           -     133,261
        Operating income (loss)(1)             2,555      (3,979)     16,499
        Segmented assets                      47,260           -     678,220
        Capital expenditures                   1,097           -      58,212
        Goodwill                                   -           -      10,523
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Three Months Ended September 30, 2008
        Revenue                                6,591           -     151,650
        Operating income (loss)(1)            (1,115)     (4,735)     27,812
        Segmented assets                      20,980           -     618,790
        Capital expenditures                     459           -      18,414
        Goodwill                                   -           -      10,523
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Nine Months Ended September 30, 2009
        Revenue                               45,357           -     418,376
        Operating income (loss)(1)             8,014     (12,552)     47,978
        Segmented assets                      47,260           -     678,220
        Capital expenditures                   2,197           -      83,931
        Goodwill                                   -           -      10,523
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        Nine Months Ended September 30, 2008
        Revenue                               18,982           -     391,933
        Operating income (loss)(1)            (2,472)    (13,072)     56,281
        Segmented assets                      20,980           -     618,790
        Capital expenditures                   3,279           -      52,574
        Goodwill                                   -           -      10,523
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        (1) Operating income (loss) is defined as net income (loss) plus
            depreciation, interest, equity share of net income from long-term
            investments, foreign exchange gains or losses, gains or losses on
            disposal of capital assets, income taxes and non-controlling
            interest.

        The following table sets forth consolidated revenue by service line:


        ---------------------------------------------------------------------
                                  Three Months Ended       Nine Months Ended
                                            Sept. 30,               Sept. 30,
                                    2009        2008        2009        2008
        ---------------------------------------------------------------------
        (000s)                        ($)         ($)         ($)         ($)

        Fracturing               115,262     125,766     353,050     323,173
        Coiled tubing             10,656      15,680      36,245      40,324
        Cementing                  4,151       8,105      19,754      21,250
        Other                      3,192       2,099       9,327       7,186
        ---------------------------------------------------------------------
                                 133,261     151,650     418,376     391,933
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    13. PROPOSED ACQUISITION

        On September 20, 2009, the Company and Century entered into a
        definitive agreement pursuant to which the Company will acquire all
        of the issued and outstanding common shares of Century, a privately
        held fracturing services company operating in Western Canada. Under
        the terms of the agreement, the purchase price of $90.0 million will
        consist of approximately $13.5 million of cash plus up to 5,144,695
        common shares of the Company, with an agreed value of $76.5 million.
        For accounting purposes, the shares issuable in the transaction have
        a fair value of approximately $82.2 million based on the weighted
        average price of the Company's shares for the 3 trading days
        preceding and the 3 trading days following the date of the agreement.
        Including estimated transaction costs, the total consideration will
        be approximately $99.5 million for accounting purposes. If approved
        by the shareholders of Century, the acquisition is expected to close
        on or after November 10, 2009.
    

%SEDAR: 00002062E

SOURCE Calfrac Well Services Ltd.

For further information: For further information: Douglas R. Ramsay, President and Chief Executive Officer, Telephone: (403) 266-6000, Fax: (403) 266-7381; Laura A. Cillis, Senior Vice President, Finance and Chief Financial Officer, Telephone: (403) 266-6000, Fax: (403) 266-7381; Tom J. Medvedic, Senior Vice President, Corporate Development, Telephone: (403) 266-6000, Fax: (403) 266-7381


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