Pure Energy Services Ltd.
TSX : PSV

Pure Energy Services Ltd.

November 13, 2007 08:00 ET

Pure Energy-2007 Third Quarter Financial Statements and M D & A

CALGARY, ALBERTA--(Marketwire - Nov. 13, 2007) -



PURE ENERGY SERVICES LTD.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2007



PURE ENERGY SERVICES LTD.
Consolidated Balance Sheets
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(Unaudited, stated in thousands of dollars)

September 30, December 31,
2007 2006
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Assets

Current assets
Cash $ 3,433 $ 2,358
Accounts receivable 22,260 31,153
Inventory 2,403 1,339
Income taxes recoverable 630 736
Deposits and prepaid expenses 2,327 1,175
Current portion of note receivable
(Notes 3(b) and 4) 497 2,331
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31,550 39,092

Note receivable (Notes 3(b) and 4) 497 4,662

Property, plant and equipment 159,184 144,467

Intangible assets 2,463 3,156

Goodwill 1,230 1,230

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$ 194,924 $ 192,607
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Liabilities and Shareholders' Equity

Current liabilities
Operating loan (Note 5) $ 4,182 $ 16,211
Accounts payable and accrued liabilities 11,464 13,055
Current portion of long-term debt 2,615 521
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18,261 29,787

Long term debt (Note 6) 38,302 13,146

Future income taxes 9,556 12,531

Shareholders' equity

Share capital (Note 7) 106,002 106,002

Contributed surplus 2,503 1,585

Accumulated other comprehensive loss (3,950) -

Retained earnings 24,250 29,556
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128,805 137,143
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Contingency (Note 11)
Subsequent event (Note 4)
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$ 194,924 $ 192,607
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See accompanying notes to the interim consolidated financial statements.



PURE ENERGY SERVICES LTD.
Consolidated Statements of Earnings (Loss) and Retained Earnings

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(Unaudited, stated in thousands of dollars, except per share amounts)

Three months ended Nine months ended
September 30, September 30,
----------------------------------------------------------------------------
2007 2006 2007 2006
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Revenue $ 31,457 $ 35,447 $ 94,072 $100,477

Expenses
Operating 23,511 23,525 72,932 66,248
Selling, general and
administrative 5,508 4,715 15,988 12,865
Depreciation and amortization 3,162 2,291 9,188 6,105
Other interest 209 - 504 -
Interest on long-term debt 408 136 1,179 431
Foreign exchange loss (gain) 56 (15) 85 294
Other expense (income) (1,818) (142) 1,958 (292)
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31,036 30,510 101,834 85,651

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Income (loss) before income
taxes 421 4,937 (7,762) 14,826

Income taxes
Current tax expense (recovery) (2,338) (1,919) - 249
Future tax expense (reduction) 1,909 3,511 (3,173) 4,292
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(429) 1,592 (3,173) 4,541

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Net income (loss) 850 3,345 (4,589) 10,285

Retained earnings, beginning of
period, as previously reported 23,400 23,450 29,556 16,510

Adjustment relating to fair
value accounting of financial
instrument (Note 3(b)) - - (717) -
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Retained earnings, beginning of
period, as re-stated 23,400 23,450 28,839 16,510
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Retained earnings, end of period $ 24,250 $ 26,795 $ 24,250 $ 26,795
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Earnings (loss) per share (Note 8)
Basic $ 0.05 $ 0.21 $ (0.29) $ 0.67
Diluted $ 0.05 $ 0.20 $ (0.29) $ 0.64
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See accompanying notes to the interim consolidated financial statements.



PURE ENERGY SERVICES LTD.
Consolidated Statements of Comprehensive Income (Loss) and Accumulated Other
Comprehensive Loss

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(Unaudited, stated in thousands of dollars)

Three months ended Nine months ended
September 30, September 30,
----------------------------------------------------------------------------
2007 2006 2007 2006
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Net income (loss) $ 850 $ 3,345 $ (4,589) $ 10,285

Other comprehensive loss, net of
tax:

Unrealized loss on translating
financial statements of
self-sustaining foreign
operations (1,762) - (4,191) -

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Other comprehensive loss for the
period (1,762) - (4,191) -

Comprehensive income (loss) for
the period $ (912) $ 3,345 $ (8,780) $ 10,285
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Three months ended Nine months ended
September 30, September 30,
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2007 2006 2007 2006
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Accumulated other comprehensive
loss on translation of foreign
operations

Balance, beginning of period $ (2,188) $ - $ - $ -
Impact of translating financial
statements of self-sustaining
foreign operations on
January 1, 2007 - - 241 -
Unrealized loss on translation
of foreign operations during
the period (1,762) - (4,191) -
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Balance, end of period $ (3,950) $ - $ (3,950) $ -
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See accompanying notes to the interim consolidated financial statements.



PURE ENERGY SERVICES LTD.
Consolidated Statements of Cash Flows

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(Unaudited, stated in thousands of dollars)

Three months ended Nine months ended
September 30, September 30,
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2007 2006 2007 2006
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Cash provided by (used in)
Operating activities
Net income (loss) $ 850 $ 3,345 $ (4,589) $ 10,285
Items not involving cash:
Depreciation and amortization 3,162 2,291 9,188 6,105
Future income tax expense
(reduction) 1,909 3,511 (3,173) 4,292
Impairment of note receivable
(Note 4) - - 4,246 -
Stock-based compensation 213 334 918 842
Gain on sale of equipment (1,816) (141) (2,175) (86)
Unrealized foreign exchange
loss 18 (41) 25 51
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4,336 9,299 4,440 21,489
Changes in non-cash working
capital balances (Note 10) (9,646) (9,724) 8,156 (4,716)
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(5,310) (425) 12,596 16,773

Investing activities
Purchases of property, plant
and equipment (7,327) (10,466) (29,235) (50,535)
Note receivable - (6,686) 473 (6,686)
Intangible asset expenditures - (725) - (1,787)
Proceeds from the sale of
equipment 5,065 426 6,125 597
Changes in non-cash working
capital balances (Note 10) 756 (1,731) (3,590) 2,353
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(1,506) (19,182) (26,227) (56,058)

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Financing activities
Operating loan (2,645) 7,749 (12,027) 7,749
Issuance of long-term debt 10,000 5,000 27,500 5,000
Repayment of long-term debt (83) (83) (250) (21,547)
Issue of share capital, net of
issue costs - (58) - 46,384
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7,272 12,608 15,223 37,586

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Increase (decrease) in cash 456 (6,999) 1,592 (1,699)
Effect of translation on foreign
currency cash and cash
equivalents (133) - (517) -
Cash, beginning of period 3,110 6,999 2,358 1,699
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Cash, end of period $ 3,433 $ - $ 3,433 $ -
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Supplemental information (Note 10)

See accompanying notes to the interim consolidated financial statements.



PURE ENERGY SERVICES LTD.
Notes to the Consolidated Financial Statements

For the three and nine months ended September 30, 2007 and 2006
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(Unaudited, stated in thousands, except per share amounts)


1. Nature of operations

Pure Energy Services Ltd. (the "Corporation") is incorporated under the Business Corporations Act (Alberta) and provides completion and drilling related oilfield services to oil and gas exploration and development entities in the Western Canadian Sedimentary Basin and the US Rocky Mountain region.

The ability to move heavy equipment in oil and gas fields in Canada is dependent on weather conditions, whereby thawing in the spring renders many secondary roads incapable of supporting heavy equipment until the ground is dry. In addition, locations in more northern regions of Canada are accessible only in winter months where the ground is frozen enough to support the equipment. As a result of this seasonality, the Corporation's activity is traditionally higher in the first and fourth quarters of the year and lower in the second and third quarters.

2. Principles of presentation

These unaudited interim consolidated financial statements of the Corporation have been prepared by management in accordance with accounting principles generally accepted in Canada following the same accounting policies and methods of application as the consolidated financial statements of the Corporation for the year ended December 31, 2006, except as disclosed in Note 3 below. The disclosures provided below are incremental to those included with the Corporation's annual consolidated financial statements. The unaudited interim consolidated financial statements and the related notes should be read in conjunction with the consolidated financial statements and the related notes for the year ended December 31, 2006.

Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end and the results of operations for the interim periods shown in these statements are not necessarily indicative of results to be expected for the fiscal year. In the opinion of management, the accompanying unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary to present fairly the consolidated results of the Corporation's operations and cash flows for the three and nine months ended September 30, 2007 and 2006.

3. Changes in accounting policies

(a) Since the Corporation's foreign operations in the United States have matured to the extent that they no longer require day to day financial assistance, they have been reclassified from integrated to self-sustaining operations. As a result, the Corporation has prospectively changed to the current rate method of foreign currency translation from the temporal method for consolidating its US operations. The exchange gain or loss attributable to current rate translation of non- monetary and monetary items as of the date of the change has been included as part of accumulated other comprehensive income (loss), a separate component of shareholders' equity.

(b) On January 1, 2007, the Corporation adopted new Canadian accounting standards for financial instruments and other comprehensive income. Prior periods have not been restated.

Financial instruments

The new standards require that the note receivable be measured at fair value using the effective interest method with any adjustment of the previous carrying amount recognized as an adjustment of the opening balance of retained earnings at the beginning of the fiscal year in which the standard is initially adopted. Future gains or losses are recognized when the asset is derecognized. On January 1, 2007, the note receivable was accounted for at its fair value and the carrying value was reduced by $717. The resulting loss of $717 was charged to opening retained earnings. During the three and nine months ended September 30, 2007, the Corporation recorded interest income of $nil (2006 - $nil) and $112 (2006 - $nil), respectively, which is included in other expense (income) on the Consolidated Statement of Earnings (Loss).

Other comprehensive income (loss)

The new standards require that the Corporation present a Consolidated Statement of Comprehensive Income (Loss), which is comprised of net income (loss) and the unrealized foreign exchange gain or loss for the period related to the net investment in foreign operations.

(c) Two new accounting standards have been issued which will come into effect on January 1, 2008. These standards require additional disclosure in the Corporation's financial statements in connection with financial instruments and capital. In addition, there is a new standard related to the measurement and disclosure of inventory which will be applied retrospectively, effective January 1, 2008. Management is currently assessing the impact of these changes.

4. Note receivable

The Corporation measures the note receivable for impairment based on the future expectations of cash receipts and the value of the outstanding principal by assessing the cash flow generating capability of the investment. Consideration is given as to whether a decline in recent or future cash flows is regarded as continuing for an extended period of time or is temporary.

The borrower has defaulted on two provisions of the sand supply agreement including failure to satisfy the quarterly repayment terms. These defaults and other factors indicate deterioration in the credit quality of the borrower to the extent that the Corporation no longer has reasonable assurance of timely collection of the full amount of the note receivable. As a result of the deterioration in the credit quality of the borrower, the Corporation has recorded an allowance for loan impairment of $4.2 million reducing the carrying amount of the note receivable to $1.1 million, representing the estimated fair value of expected future cash flows and the underlying security. This value assumes that the assets securing the Corporation's position are liquidated. The resulting impairment charge of $4.2 million has been included in other expense (income) on the Consolidated Statement of Earnings (Loss) for the nine months ending September 30, 2007.

Subsequent to September 30, 2007, the Corporation was advised that letters of intent for the sale of the borrower were entered into between a third party and the borrower's current ownership group. In addition, the third party has entered into a letter of understanding with the Corporation that revises some of the terms of the sand supply agreement with the borrower. As a condition of entering into the revised sand supply agreement, the Corporation expects to be repaid the outstanding balance of its US$5.2 million loan to the borrower. The allowance for loan impairment will be reversed to reflect the increase in the fair value of the note receivable once the cash is received by the Corporation.

5. Operating loan

The Corporation has access to a $20,000 revolving demand operating loan. Canadian dollar advances are available at either the bank's prime rate plus 0.5% or subject to availability at the bank's Bankers' Acceptance rate plus 1.75%, or in combination. US dollar advances are available with interest at the bank's US base rate plus 0.5% per annum. The loan is secured by a general security agreement.

6. Long term debt

The Corporation has a $60,000 extendible revolving term loan facility and a $5,000 non-revolving term loan facility. Advances under the extendible revolving term loan facility are available at one of the bank's prime rate plus 0.5%, or subject to availability, either at the bank's Bankers' Acceptance rate plus 1.75% or the bank's fixed rate, or in combination. The extendible revolving facility is extendible annually at the bank's option. The current extension date of this facility is June 30, 2008. Should this facility not be extended, outstanding amounts will be repayable monthly over a four-year term. The loan is secured by a general security agreement.

The non-revolving term loan facility has been advanced at the bank's prime rate plus 0.75% and is repayable monthly over fifteen years. The loan is secured by mortgages covering all of the Corporation's property.



7. Share capital

(a) Common shares issued:

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Number of
Shares Amount
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(000's)

Balance, December 31, 2006 and September 30, 2007 15,847 $ 106,002
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(b) Escrow shares:

As at September 30, 2007, the Corporation has one million and fifty four thousand shares (2006 - two million one hundred and ten thousand) held in escrow that will be released over a period of time ranging from 180 days to three years from the date of closing of the initial public offering, which occurred on February 6, 2006.

(c) Stock options:

The average fair value of options issued during the three and nine months ended September 30, 2007 was $3.30 (2006 - $5.84) and $4.08 (2006 - $7.42), respectively per option using the Black-Scholes option pricing model. The compensation cost to the Corporation for the three and nine months ending September 30, 2007 was $213 (2006 - $334) and $918 (2006 - $842), respectively.



8. Earnings (loss) per share

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Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
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Net income (loss) available to
common shareholders $ 850 $ 3,345 $(4,589) $10,285
Weighted average number of
common shares 15,847,031 15,841,698 15,847,031 15,405,319

Basic earnings (loss) per share $ 0.05 $ 0.21 $ (0.29) $ 0.67
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Net income (loss) available to
common shareholders $ 850 $ 3,345 $(4,589) $10,285
Weighted average number of
common shares 15,847,031 15,841,698 15,847,031 15,405,319
Dilutive effect of stock options - 573,421 - 602,526
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Diluted weighted average number
of common shares 15,847,031 16,415,119 15,847,031 16,007,845

Diluted earnings (loss) per share $ 0.05 $ 0.20 $ (0.29) $ 0.64
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9. Segmented information

The Corporation operates in two main industry segments which operate in two geographic areas. These segments are Completion Services and Drilling Services and provide the following services to oil and gas exploration and production companies:

- Completion Services provides logging and perforating, production testing, multiline and pressure transient analysis services which are performed on new and producing oil and gas wells; and

- Drilling Services provides contract drilling services and equipment rentals.



The segmented amounts are as follows:

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Completion Drilling
Three months ended Sept 30, 2007 Services Services Corporate Total
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Revenue $ 27,300 $ 4,157 $ - $ 31,457
Income (loss) before income taxes 957 1,596 (2,132) 421
Depreciation and amortization 2,838 324 - 3,162
Capital expenditures 5,160 2,056 111 7,327
Total assets 179,344 10,522 5,058 194,924
Goodwill 745 485 - 1,230
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Completion Drilling
Three months ended Sept 30, 2006 Services Services Corporate Total
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Revenue $ 26,476 $ 8,971 $ - $ 35,447
Income (loss) before income taxes 3,612 3,256 (1,931) 4,937
Depreciation and amortization 1,918 373 - 2,291
Capital expenditures 7,198 2,735 533 10,466
Total assets 120,781 45,107 10,087 175,975
Goodwill 745 485 - 1,230
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Completion Drilling
Nine months ended Sept 30, 2007 Services Services Corporate Total
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Revenue $ 75,096 $ 18,976 $ - $ 94,072
Income (loss) before income taxes (1,480) 4,517 (10,799) (7,762)
Depreciation and amortization 8,086 1,102 - 9,188
Capital expenditures 22,388 6,028 819 29,235
Total assets 179,344 10,522 5,058 194,924
Goodwill 745 485 - 1,230
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Completion Drilling
Nine months ended Sept 30, 2006 Services Services Corporate Total
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Revenue $ 75,674 $ 24,803 $ - $100,477
Income (loss) before income taxes 11,380 8,384 (4,938) 14,826
Depreciation and amortization 5,082 1,023 - 6,105
Capital expenditures 35,799 13,707 1,029 50,535
Total assets 120,781 45,107 10,087 175,975
Goodwill 745 485 - 1,230
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The Corporation operates in the following geographic locations:

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Three months ended Sept 30, 2007 Canada United States Total
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Revenue $ 19,659 $ 11,798 $ 31,457
Income (loss) before income taxes (117) 538 421
Property, plant and equipment 94,503 64,681 159,184
Goodwill 1,230 - 1,230
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Three months ended Sept 30, 2006 Canada United States Total
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Revenue $ 29,628 $ 5,819 $ 35,447
Income (loss) before income taxes 5,151 (214) 4,937
Property, plant and equipment 83,520 47,157 130,677
Goodwill 1,230 - 1,230
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Nine months ended Sept 30, 2007 Canada United States Total
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Revenue $ 64,954 $ 29,118 $ 94,072
Loss before income taxes (3,197) (4,565) (7,762)
Property, plant and equipment 94,503 64,681 159,184
Goodwill 1,230 - 1,230
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Nine months ended Sept 30, 2006 Canada United States Total
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Revenue $ 85,210 $ 15,267 $ 100,477
Income (loss) before income taxes 15,008 (182) 14,826
Property, plant and equipment 83,520 47,157 130,677
Goodwill 1,230 - 1,230
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10. Supplemental cash flow information

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Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
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Interest paid $ 674 $ 136 $ 1,824 $ 431
Income taxes paid (recovered) - (1,264) - (325)
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Components of change in non-cash
working capital balances:
Accounts receivable $ (9,476) $(10,190) $ 8,179 $ (1,402)
Inventory (150) (231) (1,222) (523)
Prepaid expenses and deposits 187 468 (1,255) (933)
Accounts payable and accrued
liabilities 2,887 (908) (1,136) (96)
Income taxes payable (2,338) (594) - 591
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(8,890) (11,455) 4,566 (2,363)
Change in non-cash working
capital on investing activities 756 (1,731) (3,590) 2,353
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Change in non-cash working
capital on operating activities $ (9,646) $ (9,724) $ 8,156 $ (4,716)
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11. Contingency

The Corporation's wholly-owned subsidiary, Pure Energy Services (USA), Inc. ("Pure USA") has been named in a lawsuit commenced by former employees claiming damages. Pure USA has made an offer to settle for $100 which has been recorded as a liability in the financial statements. The former employees have rejected the settlement and the occurrence of further liability is not determinable at this time.

12. Comparative figures

Certain comparative figures have been reclassified to conform with the current period's financial statement presentation.



PURE ENERGY SERVICES LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS
FORM 51-102F1

FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2007


NOVEMBER 13, 2007


MANAGEMENT'S DISCUSSION AND ANALYSIS

The following management's discussion and analysis ("MD&A") of the consolidated financial condition and results of operations of Pure Energy Services Ltd. (the "Corporation") is dated, and has been prepared taking into consideration information available to November 13, 2007 and should be read in conjunction with the consolidated unaudited financial statements of the Corporation as at and for the three and nine months ended September 30, 2007 and 2006 and should also be read in conjunction with the audited consolidated financial statements and MD&A for the years ended December 31, 2006 and 2005. Additional information relating to the Corporation, including the Corporation's Annual Information Form, is available on SEDAR at www.sedar.com. Unless otherwise indicated, references in this MD&A to "$" or "Dollars" are to Canadian dollars.

Overview

The Corporation is an oilfield services company which currently conducts operations in the Western Canadian Sedimentary Basin ("Canadian Operations") and in the Rocky Mountain region of the United States ("US Operations") through its wholly-owned subsidiaries, Pure Energy Services (USA), Inc. ("Pure USA"), Ross Wireline Services (2005) Ltd. and Motorworks Drilling Solutions Inc. and its partnership, Pure Energy Services Partnership (the "Partnership"). References to the "Corporation" in this MD&A refer to the Corporation and its subsidiaries and the Partnership. The Corporation currently has two operating segments, the Completion Services segment and the Drilling Services segment, which carry on business through various operating divisions. The Completion Services segment carries on business in both Canada and the United States. The Canadian Completion Services segment conducts operations in the Western Canadian Sedimentary Basin ("WCSB") and is comprised of the Production Testing division, the Logging and Perforating division, the Multiline division and the Pressure Transient Analysis division (the "Canadian Completion Services"). The US Completion Services segment conducts operations in the Rocky Mountain region of the United States and is comprised of the Production Testing division, the Logging and Perforating division and the Fracturing division (the "US Completion Services"). The Drilling Services segment ("Drilling Services") conducts operations in the WCSB and is comprised of the Quintera Drilling division and the Motorworks Rentals division.

Readers are cautioned that this MD&A contains certain forward-looking information. Please see "Forward-Looking Information" for a discussion concerning the use of such information in this MD&A.



Selected Consolidated Financial Information

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Three Months ended Nine Months ended
($ millions, except per September 30, September 30,
share amounts) 2007 2006 2007 2006
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(unaudited) (unaudited) (unaudited) (unaudited)
Revenue $ 31.5 $ 35.4 $ 94.1 $ 100.5
EBITDA (1) 4.2 7.4 3.1 21.4
Net income / (Loss) 0.9 3.3 (4.6) 10.3
Earnings / (Loss) per share
Basic $ 0.05 $ 0.21 $(0.29) $ 0.67
Diluted $ 0.05 $ 0.20 $(0.29) $ 0.64
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(1) EBITDA does not have a standardized meaning prescribed by GAAP.
Management believes that, in addition to net income, EBITDA is a useful
supplemental measure. EBITDA is provided as a measure of operating
performance without reference to financing decisions and income tax
impacts, which are not controlled at the operating management level.
Investors should be cautioned that EBITDA should not be construed as an
alternative to net income determined in accordance with GAAP as an
indicator of the Corporation's performance. The Corporation's method of
calculating EBITDA may differ from that of other corporations and
accordingly may not be comparable to measures used by other
corporations. Please refer to the "Non-GAAP Disclosure" for the
reconciliation to net income.


Third quarter Highlights

The Corporation's 2007 third quarter revenue decreased 11% compared to the 2006 third quarter. The Corporation recorded a $1.8 million gain relating to the sale of a drilling rig. Net income of $0.9 million and earnings per share of $0.05 were recorded by the Corporation during the 2007 third quarter.

WCSB activity levels experienced during the 2007 third quarter compared to the 2006 third quarter decreased significantly as indicated by a decline of 23% for all well types and a decline of 34% for natural gas wells according to the Petroleum Services Association of Canada's ("PSAC") well count(1) and a 34% decline in the number of active rigs according to the Canadian Association of Oilwell Drilling Contractor's ("CAODC") rig count(2). Industry activity levels decreased significantly as a result of weak customer demand predominantly related to natural gas activity.

On an overall basis, Canadian Completion Services results reflected this decline in activity with a 24% decline in overall job count and significant reductions in revenue and income before income taxes. However, the Logging and Perforating and Multiline divisions' job counts did not decrease as much as the decrease in industry well count and rig count. One time severance and termination expenses of $0.7 million have been included in the Canadian Completion Services segment 2007 third quarter results. This segment has also experienced significant headcount attrition during the quarter. Management estimates that $1 million in annual savings related to this attrition will be realized in the future.

Drilling Services results also reflected this decline in activity with a large decrease in rig utilization and significant reductions in revenue and income before income taxes for this segment. The Quintera Drilling division's rig utilization was lower than the industry average predominantly as a result of the decrease in shallow gas directed drilling activity combined with a significant decrease in activity from a major customer. Reduced industry activity levels also impacted the Motorworks Rentals division's job count; however, the decrease is not as significant as the decline in well count and rig count.

Management is currently reviewing all of Canadian Completion Services, Drilling Services and Corporate expenses and will reduce costs wherever it is prudent to do so with the intention of improving the future profitability of the Canadian Operations and Corporation as a whole.

Activity levels in the US Rocky Mountain region have remained consistent relative to 2006 with the Q3 2007 rig count(3) decreasing 1% compared to the Q3 2006 rig count. The US Production Testing division experienced 58% growth in revenue and income before income taxes increased by over 300% as a result of the revenue growth coupled with operational leverage on the division's fixed cost structure. Higher utilization levels experienced by the division are a result of an increase in equipment under contract combined with an overall increase in demand for production testing services in the Rocky Mountain region. During the 3rd quarter, 4 production testing units from Canadian Completion Services were transferred to US Completion Services in response to the increase in demand currently being experienced in the Rocky Mountain region and the higher utilization levels experienced by the US division.

The US Fracturing division's 2007 third quarter financial results modestly improved relative to the 2007 second quarter; however, continued to be hampered by a lack of fracturing sand supply from its main fracturing sand supplier. A quarter-over-quarter revenue increase is a positive indicator that the Fracturing division is building customer acceptance. The anticipated resolution of the issues associated with the fracturing sand supplier should provide the division with the opportunity to increase its revenue base.

(1) Source - 2007 PSAC Canadian Drilling Activity Forecast October Update

(2) Source - CAODC Average Monthly Drilling Rig Count - Western Canada

(3) Source - Baker Hughes Weekly Rotary Rig Count

Year-to-Date Highlights

The Corporation's 2007 year-to-date third quarter revenue decreased 6% compared to the 2006 year-to-date third quarter revenue. Year-to-date EBITDA decreased 85% and a net loss of $4.6 million was recorded during the nine months ended September 30, 2007 as compared to net income of $10.3 million recorded during the nine months ended September 30, 2006.

Year-to-date WCSB activity levels have declined significantly which has negatively impacted the Canadian Completion Services' and Drilling Services' results. Additional equipment added by industry participants to the WCSB combined with weak customer demand has reduced the Canadian Completion Services and Drilling Services utilization levels and put downward pressure on pricing. As a result, the 2007 year-to-date operating results for these segments are significantly lower than the 2006 year-to-date results.

The US Rocky Mountain region has not experienced a similar decline in activity. The US Production Testing division continued to operate at near full capacity during the first nine months of 2007 and its financial results reflect these strong activity levels. The US Production Testing division's consistent financial results over the past year are reflective of the solid activity levels experienced in the US Rocky Mountain region combined with the fact that this division has firmly established itself in this market.

The US Fracturing division's activity levels have gradually increased since April 2007; however, the division has recorded a significant operating loss as the level of activity has not been sufficient to cover the division's operating expenses. The inability of the division's fracturing sand supplier to supply adequate quantities of fracturing sand has significantly reduced the division's ability to generate revenue.



Results of Operations

Three Months Ended September 30, 2007 Compared to the Three Months Ended
September 30, 2006

Canadian Completion Services

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Canadian Completion Services
Financial Results
Three months ended, September % of September % of
($ thousands, unaudited) 30, 2007 Revenue 30, 2006 Revenue
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Revenue $ 15,502 100% $ 20,657 100%

Expenses
Operating 11,058 71.3% 13,563 65.7%
Selling, general and
administrative 2,384 15.4% 1,851 9.0%
Depreciation and
amortization 1,628 10.5% 1,423 6.9%
Other expense / (income) 11 0.1% (6) 0.0%

Income before income
taxes $ 421 2.7% $ 3,826 18.5%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Canadian Completion Services
Financial Results Year-Over-Year Change
Three months ended,
($ thousands, unaudited) $ Percentage
----------------------------------------------------------------------------
Revenue $ (5,155) (25)%

Expenses
Operating (2,505) (18)%
Selling, general and administrative 533 29%
Depreciation and amortization 205 14%
Other expense / (income) 17

Income before income taxes $ (3,405) (89)%
----------------------------------------------------------------------------


Canadian Completion Services Revenue

Revenue for Canadian Completion Services decreased 25% in the 2007 third quarter compared to the 2006 third quarter and was largely attributable to a 24% decline in the job count. The segment's job count decline compares to the 23% decline for all well types and 34% decline for natural gas wells. The average revenue per job for the segment was comparable quarter-over-quarter.

The Production Testing division's revenue and job count decreased 40% and 37% respectively. The job count decrease was comparable to the decline in natural gas activity levels. Average revenue per job decreased by 5% as a result of downward pressure on pricing due to the decline in industry activity levels increasing competition for services provided by this division.

The Multiline division's revenue and job count decreased 11% and 17% respectively, which was partially offset by an 8% increase in average revenue per job. The job count decrease was less than the decline in industry activity levels due to an increase in the amount of optimization services performed by the division. The increase in average revenue per job was the result of additional charges relating to new regulatory requirements which was partially offset by the lower average revenue per job typically earned from optimization services.

The Logging and Perforating division's revenue and job count decreased 15% and 4% respectively. The job count decrease is less than the decline in industry activity levels due to increased activity from a major customer combined with a shift towards deeper gas and oil directed activity. Average revenue per job decreased by 12% as a result of competitive pressure to reduce prices.



----------------------------------------------------------------------------
Canadian Completion 2007 2006 As at
Services Third Quarter Third Quarter December 31,
Unit Complement Average Ending Average Ending 2007(A) 2006
----------------------------------------------------------------------------
Production Testing
Division 43.7 43 39.7 41 43 46
Logging and Perforating
Division 21.0 21 19.0 19 20 20
Multiline Division 16.0 16 16.0 16 16 16
----------------------------------------------------------------------------
Canadian Completion
Services Total 80.7 80 74.7 76 79 82
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(A) - Expected equipment capacity as at December 31, 2007 based on approved
budgets.


Canadian Completion Services Income before Income Taxes

Canadian Completion Services income before income taxes decreased significantly in the 2007 third quarter compared to the 2006 third quarter as a result of the significant decrease in revenue. SG&A expenses increased as a result of one time expenditures totalling $0.7 million relating to severance and termination costs. Excluding the severance and termination costs, Q3 2007 SG&A expenses decreased approximately 10% relative to Q3 2006.

The Production Testing division's income before income taxes decreased significantly in the 2007 third quarter compared to the 2006 third quarter primarily due to the decrease in revenue. The division's gross margin percentage significantly increased relative to the 2007 second quarter as a result of the revenue increase combined with better cost control. Depreciation expense increased as a result of the additional equipment deployed.

The Logging and Perforating division's income before income taxes decreased by 34% in the 2007 third quarter compared to the 2006 third quarter primarily due to the decrease in revenue, which was partially offset by decreases in operating and SG&A expenses. Operating and SG&A expenses have decreased as a result of cost efficiencies implemented by the division. These cost efficiencies have been partially offset by an increase in wages required to retain high quality staff.

The Multiline division's income before income taxes decreased significantly in the 2007 third quarter compared to the 2006 third quarter primarily due to the decrease in revenue. The Multiline division tends to have a higher fixed cost component to its overall cost structure compared to the other divisions. These fixed costs are necessary to appropriately service the more technical work performed by the Multiline division.



US Completion Services

----------------------------------------------------------------------------
US Completion Services
Financial Results
Three months ended, September % of September % of
($ thousands, unaudited) 30, 2007 Revenue 30, 2006 Revenue
----------------------------------------------------------------------------
Revenue $ 11,798 100% $ 5,819 100%

Expenses
Operating 9,135 77.4% 4,929 84.7%
Selling, general and
administrative 915 7.8% 609 10.5%
Depreciation and
amortization 1,210 10.3% 495 8.5%
Other expense / (income) - - - -

Income (Loss) before
income taxes $ 538 4.6% $ (214) (3.7)%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
US Completion Services
Financial Results Year-Over-Year Change
Three months ended,
($ thousands, unaudited) $ Percentage
----------------------------------------------------------------------------
Revenue $ 5,979 103%

Expenses
Operating 4,206 85%
Selling, general and administrative 306 50%
Depreciation and amortization 715 144%
Other expense / (income) - -

Income (Loss) before income taxes $ 752 351%
----------------------------------------------------------------------------


US Completion Services Revenue

US Completion Services revenue increased 103% in the 2007 third quarter compared to the 2006 third quarter as a result of the significant increase in the US Production Testing division's revenue and the additional revenue generated by the Fracturing and US Logging and Perforating divisions. The significant increase in revenue occurred despite the average rig count in the Rocky Mountain region decreasing by 1%, indicating a marginal decrease in industry activity levels during the 2007 third quarter relative to the 2006 third quarter.

The US Production Testing division produced another quarterly record with revenue and job count increasing 58% and 53%, respectively in the 2007 third quarter compared to the 2006 third quarter. The division operated at significantly higher utilization levels when compared to the prior year, and increased equipment capacity by transferring 4 units from Canadian Completion Services. The higher utilization levels are a result of an increase in equipment under contract combined with an overall increase in demand for production testing services in the Rocky Mountain region. Average revenue per job for the division increased by 4% as a result of price increases implemented in the 2006 fourth quarter.

The Fracturing division's revenue for the 2007 third quarter increased 79% over the 2007 second quarter. The increase in revenue is indicative of increasing customer acceptance of the Fracturing division in the Piceance basin. Management expects fracturing revenue to continue to increase on a quarter-over-quarter basis because of the increased customer acceptance, as evidenced by the recent award of two fracturing services contracts by a major independent oil and gas producer, combined with the resolution of the issues plaguing the Corporation's fracturing sand supplier's operations.

The US Logging and Perforating division's revenue for the 2007 third quarter increased 6% over the 2007 second quarter. Revenue continues to increase for this division as a result of increased customer acceptance in the Rocky Mountain region. Subsequent to the end of the quarter, a third Logging and Perforating unit has been transferred from Canadian Completion Services to US Completion Services in anticipation of levels of activity sufficient to utilize three units.



----------------------------------------------------------------------------
US Completion 2007 2006 As at
Services Third quarter Third quarter December 31,
Unit Complement Average Ending Average Ending 2007(A) 2006
----------------------------------------------------------------------------
Production Testing
Division 24.0 24 19.0 20 24 21
Logging and Perforating
Division 2.0 2 2.0 2 3 2
Fracturing Division(B) 2.0 2 - - 3 1
----------------------------------------------------------------------------
US Completion Services
Total 28.0 28 21.0 22 30 24
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(A) - Expected equipment capacity as at December 31, 2007 based on approved
budgets.
(B) - A fracturing spread is made up of several pieces of specialized
equipment.


US Completion Services Income before Income Taxes

The US Completion Services 2007 third quarter income before income taxes increased by $0.8 million when compared to the 2006 third quarter as a result of the significant increase in the income before income taxes of the US Production Testing division, which was partially offset by the operating loss incurred by the Fracturing division, an increase in administrative expenses associated with the growth of the US corporate office in Denver, an increase in depreciation and amortization expense, and a small operating loss incurred by the Logging and Perforating division. Depreciation and amortization expense has increased as a result of the additional equipment deployed in US Completion Services coupled with amortization of the Fracturing and US Logging and Perforating divisions' deferred pre-operating costs.

The US Production Testing division's income before income taxes set another quarterly record and increased significantly relative to the 2006 third quarter as a result of the increase in revenue combined with positive leverage on the division's cost structure. Strong margins were generated by the US Production Testing division as a result of high equipment utilization experienced during the quarter.

The Fracturing division experienced an operating loss in the 2007 third quarter due to low equipment utilization coupled with the significant amount of fixed expenses relating to the infrastructure required to operate this division. The operating loss recorded during the 2007 third quarter was lower relative to the 2007 second quarter because of the quarter-over-quarter increase in revenue.

Administrative expenses have increased as a result of the growth in the infrastructure required to support the current and future growth of the US Operations.



Drilling Services

----------------------------------------------------------------------------
Drilling Services
Financial Results
Three months ended, September % of September % of
($ thousands, unaudited) 30, 2007 Revenue 30, 2006 Revenue
----------------------------------------------------------------------------
Revenue $ 4,157 100% $ 8,971 100%

Expenses
Operating 3,318 79.8% 5,033 56.1%
Selling, general and
administrative 746 17.9% 445 5.0%
Depreciation and
amortization 324 7.8% 373 4.2%
Other income (1,827) (43.9)% (136) (1.5)%

Income before income
taxes $ 1,596 38.4% $ 3,256 36.3%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Drilling Services
Financial Results Year-Over-Year Change
Three months ended,
($ thousands, unaudited) $ Percentage
----------------------------------------------------------------------------
Revenue $ (4,814) (54)%

Expenses
Operating (1,715) (34)%
Selling, general and administrative 301 68%
Depreciation and amortization (49) (13)%
Other income 1,691

Income before income taxes $ (1,660) (51)%
----------------------------------------------------------------------------


Drilling Services Revenue

Drilling Services' revenue decreased 54% in the 2007 third quarter compared to the 2006 third quarter largely as a result of the decrease in rig utilization coupled with a decrease in average revenue per day for the Quintera Drilling division.

The Quintera Drilling division's revenue decreased 63% in the 2007 third quarter compared to the 2006 third quarter. The decrease in revenue was largely a result of a decrease in utilization resulting from lower industry activity levels as evidenced by the CAODC active rig count decrease of 34%. An average of 9.3 drilling rigs operated during the 2007 third quarter at an average utilization rate of 17% compared to an average of 8.0 drilling rigs operating during the 2006 third quarter at an average utilization rate of 44%. Quintera's rig utilization is lower than the industry average predominantly as a result of the decrease in shallow gas directed drilling activity combined with a significant decrease in activity from a major customer. The slowdown led to downward pressure on drilling rig day rates which resulted in the average revenue per day decreasing by 17%.

The Motorworks Rentals division's revenue decreased 11% in the 2007 third quarter compared to the 2006 third quarter as a result of a 17% decrease in job count arising from the industry slowdown. The decrease in job count is lower than the decline in industry activity levels as a result of the division expanding its customer base.



----------------------------------------------------------------------------
2007 2006 As at
Drilling Services Third quarter Third quarter December 31,
Unit Complement Average Ending Average Ending 2007(A) 2006
----------------------------------------------------------------------------
Drilling rigs 9.3 9 8.0 8 10 10
Mud motors 60.0 60 35.3 36 60 60
----------------------------------------------------------------------------
(A) - Expected equipment capacity as at December 31, 2007 based on approved
budgets.


Drilling Services Income before Income Taxes

Drilling Services' income before income taxes decreased by $1.7 million in the 2007 third quarter compared to the 2006 third quarter. This decrease was partially offset by the $1.8 million gain on sale of a rig recorded in other income. The significant decrease in income from operations is primarily the result of the reduced revenue levels coupled with the fixed cost component of the segment's overall cost structure.

The Quintera Drilling division recorded a small loss before income taxes during the 2007 third quarter. The significant decrease in operating results was primarily due to the decrease in revenue recorded during the quarter. The Quintera Drilling division's cost structure is weighted more towards variable expenses which partially mitigated the earnings impact of the significant revenue reduction experienced during the quarter.

The Motorworks Rentals division's income before income taxes decreased by $0.5 million as a result of the decrease in revenue coupled with increases in SG&A and depreciation expense. The increase in SG&A expenses is the result of additional employees required to support the growth of the business since the 2006 third quarter. Depreciation expense has increased as a result of the capital added since the 2006 third quarter.



Corporate

----------------------------------------------------------------------------
Corporate Services
Financial Results % of % of
Three months ended, September Consolidated September Consolidated
($ thousands, unaudited) 30, 2007 Revenue 30, 2006 Revenue
----------------------------------------------------------------------------
Expenses
Selling, general and
administrative $ 1,463 4.7% $ 1,810 5.1%
Interest on long-term
debt 408 1.3% 136 0.4%
Other interest 209 0.7% - -
Foreign exchange (gain)
/ loss 56 0.2% (15) 0.0%
Other income (2) 0.0% - -

Loss before income taxes $ 2,134 6.8% $ 1,931 (5.4)%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Corporate Services
Financial Results Year-Over-Year Change
Three months ended,
($ thousands, unaudited) $ Percentage
----------------------------------------------------------------------------
Expenses
Selling, general and
administrative $ (347) 19%
Interest on long-term
debt 272 200%
Other interest 209
Foreign exchange (gain)
/ loss 71
Other income (2)

Loss before income taxes $ 203 11%
----------------------------------------------------------------------------


Corporate expenses for the 2007 third quarter increased 11% compared to the 2006 third quarter relative to an 11% decrease in consolidated revenue for the same comparative periods. SG&A expenses decreased $0.3 million as a result of a decrease in stock based compensation, entertainment and promotion, and legal expenses. Interest expense increased $0.5 million as a result of higher debt levels carried during the 2007 third quarter compared to the 2006 third quarter.

Income Tax Expense

The 2007 third quarter income tax provision decreased relative to the 2006 third quarter income tax provision largely due to the decrease in income before income taxes. The total income tax recovery differs from the expected total income tax expense as a result of the tax impact of permanent differences including the non-taxable portion of a capital gain, the impact of the substantively enacted tax rate reduction relating to the 2011 tax year and differences between the 2007 tax rate and future tax rates expected to be applied to the Corporation's future tax assets and liabilities.



Results of Operations

Nine Months Ended September 30, 2007 Compared to the Nine Months Ended
September 30, 2006

Canadian Completion Services

----------------------------------------------------------------------------
Canadian Completion Services
Financial Results
Nine months ended, September % of September % of
($ thousands, unaudited) 30, 2007 Revenue 30, 2006 Revenue
----------------------------------------------------------------------------
Revenue $ 45,978 100% $ 60,407 100%

Expenses
Operating 36,011 78.3% 39,294 65.0%
Selling, general and
administrative 6,505 14.1% 5,637 9.3%
Depreciation and
amortization 4,800 10.4% 3,866 6.4%
Other expense / (income) (288) (0.6)% 48 0.1%

Income (Loss) before
income taxes $ (1,050) (2.3)% $ 11,562 19.1%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Canadian Completion Services
Financial Results Year-Over-Year Change
Nine months ended,
($ thousands, unaudited) $ Percentage
----------------------------------------------------------------------------
Revenue $ (14,429) (24)%

Expenses
Operating (3,283) (8)%
Selling, general and administrative 868 15%
Depreciation and amortization 934 24%
Other expense / (income) (336)

Income (Loss) before income taxes $ (12,612) (109)%
----------------------------------------------------------------------------


Canadian Completion Services Revenue

Revenue for Canadian Completion Services decreased 24% in the first nine months of 2007 compared to the first nine months of 2006. The decrease was largely attributable to a 27% decline in the job count, which was partially offset by a 5% increase in average revenue per job. Similar job count declines were experienced in all three divisions. The job count decline is comparable to the decline in industry activity as evidenced by the PSAC well count decline of 25%(1) and the CAODC active rig count decline of 34%(2). An increase in average revenue per job was experienced in all three divisions, with the highest increase occurring in the Multiline division.

The Production Testing division's revenue and job count both decreased by 29% as a result of the decline in industry activity levels. The decreases in revenue and job count were consistent with the declines in the PSAC well count and the CAODC active rig count. The division's average revenue per job in 2007 was virtually unchanged from the prior year.

The Multiline division's revenue and job count decreased 22% and 30% respectively, which was partially offset by a 13% increase in average revenue per job. The decrease in job count was comparable to the decline in industry activity levels. The higher average revenue per job was largely the result of additional charges relating to new regulatory requirements.

The Logging and Perforating division's revenue and job count decreased 20% and 22% respectively, which was partially offset by a 3% increase in average revenue per job. The job count decrease is less than the decline in industry activity levels primarily due to the division's ability to shift its focus towards deeper gas and oil directed drilling activity. Average revenue per job increased marginally as a result of the pricing impact from the shift towards deeper gas and oil directed drilling activity, which typically experiences higher revenue per job and lower number of jobs, relative to shallow gas directed drilling activity.

Canadian Completion Services Income before Income Taxes

Canadian Completion Services income before income taxes decreased significantly in the first nine months of 2007 compared to the first nine months of 2006 as a result of the significant decrease in revenue coupled with the segment's fixed portion of the overall cost structure. Increases in depreciation, insurance, and rent also contributed to the decrease in income before income taxes. General and administrative wage expenses increased due to one-time severance and termination costs of $0.7 million. Repairs and maintenance, insurance, and depreciation have increased as a result of the additional equipment to Canadian Completion Services.

The Production Testing division's income before income taxes as a percentage of revenue decreased significantly as a result of the decrease in revenue coupled with increases in depreciation and vehicle expenses. Depreciation and vehicle expenses increased as a result of equipment additions to the division. The division's operating and general and administrative expenses decreased significantly on a dollar basis; however, the decrease was not as great in percentage terms as the decrease in revenue.

The Logging and Perforating division's income before income taxes as a percentage of revenue decreased significantly as a result of the decrease in revenue coupled with increases in wages and benefits, depreciation, rent, insurance, and repairs and maintenance expenses. Wages and benefits have increased as a result of wage increases. Repairs and maintenance, insurance, and depreciation have increased as a result of adding equipment to the division.

The Multiline division's income before income taxes as a percentage of revenue decreased significantly as a result of the decrease in revenue coupled with increases in salary and wages, repairs and maintenance and insurance expenses. Wage expenses have increased as a result of wage increases and an increase in head count. Repairs and maintenance expense and insurance have increased as a result of capital additions to the division.

(1) Source - 2007 PSAC Canadian Drilling Activity Forecast October Update

(2) Source - CAODC Average Monthly Drilling Rig Count - Western Canada



US Completion Services

----------------------------------------------------------------------------
US Completion Services
Financial Results
Nine months ended, September % of September % of
($ thousands, unaudited) 30, 2007 Revenue 30, 2006 Revenue
----------------------------------------------------------------------------
Revenue $ 29,118 100% $ 15,267 100%

Expenses
Operating 23,713 81.4% 12,821 84.0%
Selling, general and
administrative 2,549 8.8% 1,410 9.2%
Depreciation and
amortization 3,286 11.3% 1,216 8.0%
Other expense / (income) - - 2 -

Income (Loss) before
income taxes $ (430) (1.5)% $ (182) (1.2)%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
US Completion Services
Financial Results Year-Over-Year Change
Nine months ended,
($ thousands, unaudited) $ Percentage
----------------------------------------------------------------------------
Revenue $ 13,851 91%

Expenses
Operating 10,892 85%
Selling, general and administrative 1,139 81%
Depreciation and amortization 2,070 170%
Other expense / (income) (2)

Income (Loss) before income taxes $ (248) 136%
----------------------------------------------------------------------------


US Completion Services Revenue

US Completion Services' revenue increased 91% in the first nine months of 2007 compared to the first nine months of 2006 primarily as a result of a significant increase in the US Production Testing division's revenue and revenue generated by the Fracturing and US Logging and Perforating divisions. The average rig count in the Rocky Mountain region was consistent (3) during the first nine months of 2007 relative to the first nine months of 2006.

The US Production Testing division's revenue and job count increased 58% and 53%, respectively, in the first nine months of 2007 compared to the first nine months of 2006. The significant job count increase was largely the result of a six unit or 33% increase in unit capacity coupled with high utilization and compares favourably to the flat average rig count experienced in the Rocky Mountain region. Average revenue per job for the US Production Testing division increased by 2% as a result of price increases implemented in the 2006 fourth quarter.

The Fracturing division's first year of operations continued to be hampered by its main fracturing sand supplier's inability to provide sufficient quantities of sand resulting in significantly lower revenue levels relative to management's expectations. Notwithstanding this fact, the Fracturing division has been able to perform a number of fracturing treatments and has been building customer acceptance throughout the year, as evidenced by the recent award of two fracturing services contracts by a major independent oil and gas producer. The anticipated resolution of the main fracturing sand supplier's operational issues is expected to provide the Fracturing division with the opportunity to grow significantly in 2008.

The US Logging and Perforating division's revenue for the first nine months of 2007 continues to increase quarter-over-quarter, although at a slower growth rate than management's expectations.

US Completion Services Income before Income Taxes

US Completion Services' income before income taxes decreased by $0.2 million in the first nine months of 2007 compared to the first nine months of 2006. The US Production Testing division's income before income taxes increased significantly as a result of the increase in revenue and strong utilization of the production testing equipment. The increase in the US Production Testing division's income before income taxes was offset by the operating loss incurred by the Fracturing division, an increase in depreciation and amortization expense, an increase in administrative expenses associated with the growth of the US corporate office in Denver, and a small operating loss incurred by the US Logging and Perforating division. Depreciation and amortization expense has increased as a result of the additional equipment deployed in US Completion Services coupled with amortization of the Fracturing and US Logging and Perforating divisions' deferred pre-operating costs.

(3) Source - Baker Hughes Weekly Rotary Rig Count

The US Production Testing division's income before income taxes increased significantly as a result of the increase in revenue combined with positive leverage on the division's cost structure as a result of high equipment utilization. The US Production Testing division experienced decreases in salaries and wages, repairs and maintenance and travel and accommodation as a percentage of revenue. These decreases were partially offset by increases in subsistence, fuel and vehicle expenses.

A significant operating loss was recorded by the Fracturing division due to lower than expected revenue levels coupled with the significant amount of fixed expenses relating to the infrastructure required to operate this division.

Administrative expenses have increased as a result of growth in the administrative infrastructure required to support the current and future growth of the US Operations.



Drilling Services

----------------------------------------------------------------------------
Drilling Services
Financial Results
Nine months ended, September % of September % of
($ thousands, unaudited) 30, 2007 Revenue 30, 2006 Revenue
----------------------------------------------------------------------------
Revenue $ 18,976 100% $ 24,803 100%

Expenses
Operating 13,208 69.6% 14,133 57.0%
Selling, general and
administrative 2,037 10.7% 1,399 5.6%
Depreciation and
amortization 1,102 5.8% 1,023 4.1%
Other expense / (income) (1,888) (9.9)% (136) (0.5)

Income before income
taxes $ 4,517 23.8% $ 8,384 33.8%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Drilling Services
Financial Results Year-Over-Year Change
Nine months ended,
($ thousands, unaudited) $ Percentage
----------------------------------------------------------------------------
Revenue $ (5,827) (23)%

Expenses
Operating (925) (7)%
Selling, general and administrative 638 46%
Depreciation and amortization 79 8%
Other expense / (income) (1,752)

Income before income taxes $ (3,867) (46)%
----------------------------------------------------------------------------


Drilling Services Revenue

Drilling Services' revenue decreased by 23% in the first nine months of 2007 compared to the first nine months of 2006 as a result of the decline in industry activity levels as evidenced by the decrease in the CAODC rig count of 34%. The Quintera Drilling division's revenue decreased by 32%, however this decrease was partially offset by the 36% increase in revenue from the Motorworks Rentals division.

The Quintera Drilling division's revenue decreased by $2.3 million in the first nine months of 2007 compared to the first nine months of 2006 as a result of the decrease in industry activity. An average of 9.6 drilling rigs operated during the first nine months of 2007 at an average utilization rate of 24% compared to an average of 6.9 drilling rigs operating during the first nine months of 2006 at an average utilization rate of 52%. Average revenue per day decreased by 1% during the first nine months of 2007 compared to the first nine months of 2006 due to a decrease in drilling rig day rates, which was partially offset by an increase in ancillary revenue.

The Motorworks Rentals division's revenue increased by $1.5 million or 36% in the first nine months of 2007 compared to the first nine months of 2006 largely as a result of the significant increase in equipment capacity coupled with the expansion of the division's customer base.

Drilling Services Income before Income Taxes

Drilling Services' income before income taxes decreased by $3.9 million in the first nine months of 2007 compared to the first nine months of 2006. The decrease is primarily the result of the reduced revenue levels coupled with an increase in SG&A expenses. SG&A expenses increased as a result of additional administrative support to the segment. Other income has increased as a result of the gain on the sale of a rig totalling $1.8 million.

The Quintera Drilling division's income before income taxes decreased by approximately 70% primarily due to the decrease in revenue combined with negative leverage on the division's fixed cost structure.

The Motorworks Rentals division's income before income taxes decreased by nine percentage points due to an increase in SG&A expenses as a result of an increase in head count. The sales force for this division has been increased to support the year-to-date increase in revenue and future growth expected in this division.



Corporate

----------------------------------------------------------------------------
Corporate Services
Financial Results % of % of
Nine months ended, September Consolidated September Consolidated
($ thousands, unaudited) 30, 2007 Revenue 30, 2006 Revenue
----------------------------------------------------------------------------
Expenses
Selling, general and
administrative $ 4,897 5.2% $ 4,419 4.4%
Interest on long-term
debt 1,179 1.3% 431 0.4%
Other interest 504 0.5% - -
Foreign exchange (gain)
/ loss 85 0.1% 294 0.3%
Other expense / (income) 4,134 4.4% (206) (0.2)%

Loss before income taxes $ 10,799 11.5% $ 4,938 (4.9)%
----------------------------------------------------------------------------


----------------------------------------------------------------------------
Corporate Services
Financial Results Year-Over-Year Change
Nine months ended,
($ thousands, unaudited) $ Percentage
----------------------------------------------------------------------------
Expenses
Selling, general and administrative $ 478 11%
Interest on long-term debt 748 174%
Other interest 504
Foreign exchange (gain) / loss (209) (71)%
Other expense / (income) 4,340

Loss before income taxes $ 5,861 119%
----------------------------------------------------------------------------


Corporate expenses for the nine months ended September 30, 2007 increased 119% compared to the nine months ended September 30, 2006 relative to a 6% decrease in consolidated revenue for the same comparative periods. Other expenses increased significantly as a result of the impairment of the note receivable of $4.2 million. Please refer to the Critical Accounting Estimates section in this MD&A for further discussion of the note receivable impairment. SG&A expenses increased $0.5 million or 11%, primarily as a result of higher salaries and wages, an increase in professional fees related to compliance with Multilateral Instrument 52-109 and an increase in insurance premiums. Interest expense increased by $1.3 million as a result of higher debt levels carried during the first nine months of 2007 compared to the first nine months of 2006.

Income Tax Expense

The income tax provision for the first nine months of 2007 decreased relative to the first nine months of 2006 largely due to the decrease in income before income taxes. The total income tax recovery differs from the expected total income tax recovery as a result of the tax impact of permanent differences including the non-taxable portion of a capital gain, the impact of the substantively enacted tax rate reduction relating to the 2011 tax year and differences between the 2007 tax rate and future tax rates expected to be applied to the Corporation's future tax assets and liabilities.



Capital Expenditures

Three months ended Nine months ended
September 30, September 30,
($ thousands) 2007 2006 2007 2006
----------------------------------------------------------------------------
Canadian Completion Services $ 340 $ 1,571 $ 3,366 $ 7,521
US Completion Services 4,820 5,626 19,022 28,279
Drilling Services 2,056 2,736 6,028 13,707
Corporate 111 533 819 1,028
----------------------------------------------------------------------------
Total Capital Expenditures $ 7,327 $ 10,466 $ 29,235 $ 50,535
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Canadian Completion Services capital expenditures for the first nine months of 2007 represent sustaining capital, the purchase of real property, and payments relating to two mini-loggers.

US Completion Services capital expenditures for the first nine months of 2007 represent final payments on the second fracturing spread, progress payments on the third fracturing spread, a deposit on real property, and sustaining capital.

Drilling Services capital expenditures for the first nine months of 2007 represent final payments relating to Quintera Drilling division's ninth and tenth drilling rigs, progress payments relating to the construction of a new double rig, support equipment for the Motorworks Rentals division, and sustaining capital.

Liquidity and Capital Resources

Cash Provided by Operating Activities for the Three Months Ended September 30, 2007

Cash payments relating to operating and interest expenses exceeded cash received for services performed during the quarter ended September 30, 2007 by $5.3 million.

Cash Provided by Operating Activities for the Nine Months Ended September 30, 2007

Cash received for services performed exceeded cash payments relating to operating and interest expenses during the nine months ended September 30, 2007 by $12.6 million.



Working Capital

----------------------------------------------------------------------------
As at As at
($ thousands) September 30, 2007 December 31, 2006
----------------------------------------------------------------------------
Current assets $ 31,550 $ 39,092
Current liabilities 18,261 29,787
----------------------------------------------------------------------------
Working capital $ 13,289 $ 9,305
----------------------------------------------------------------------------
----------------------------------------------------------------------------


The increase in working capital of $4.0 million was primarily the result of a $12.0 million decrease in the operating loan, which was partially offset by the reduction in accounts receivable of $8.8 million.

Financing

The Corporation's primary sources of financing are bank debt and equity issuances. In March 2007, the Corporation amended its loan agreement to increase the extendible revolving term loan facility from $50 million to $60 million and to extend the renewal date under the facility to June 30, 2008, maintaining all other terms and conditions of the existing facility.

As at November 9, 2007, the Corporation had 15,847,031 common shares and 1,521,523 stock options outstanding.

The Corporation, through the conduct of its operations, has undertaken certain contractual obligations. As at September 30, 2007, the Corporation's contractual obligations were as follows:



----------------------------------------------------------------------------
Payments Due by Period
Less
Contractual Obligations than 1 1 - 3 4 - 5 After
($ thousands) Total Year Years Years 5 Years
----------------------------------------------------------------------------
Long-term debt obligations (1) $40,917 $ 2,615 $18,917 $16,635 $ 2,750
Purchase obligations 11,360 11,360 - - -
Operating leases 8,540 3,584 3,602 991 363
----------------------------------------------------------------------------
Total Contractual Obligations $60,817 $17,559 $22,519 $17,626 $ 3,113
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1) Long-term debt obligations represent balances outstanding under the
extendible revolving loan facility and the non-revolving loan facility
and the obligations in the table above assumes the revolving facility
is not renewed in 2008.


Cash Requirements

----------------------------------------------------------------------------
As at September 30, 2007
----------------------------------------------------------------------------
Committed capital expenditures $ 16,400
Uncommitted capital expenditures 3,754
----------------------------------------------------------------------------
Remaining capital budget $ 20,154
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----------------------------------------------------------------------------


The Corporation has committed to spend $16.4 million which represents the capital expenditures necessary to complete capital projects currently underway and provided for under the Corporation's capital budget. The remaining $3.8 million is uncommitted and represents projects not yet started under the Corporation's capital budget.

The Corporation has historically financed its capital expenditures with funds from operations, equity issuances and debt. As at September 30, 2007, the Corporation has available debt capacity of $23.5 million on its extendible revolving term loan facility.

Fracturing Sand Supply

In July, 2007, Pure USA commenced legal action against its main fracturing sand supplier, Legacy Resources Company LLC ("Legacy") for breach of contract and other causes of action. In October, 2007, Pure USA was advised that letters of intent were entered into between a private equity firm (the "Purchaser") and Legacy's current ownership group for the acquisition of Legacy. In addition to the letters of intent with the Legacy owners, the Purchaser entered into a letter of understanding (the "LOU") with Pure USA that revises some of the terms of the sand supply agreement with Legacy. The Purchaser and Pure USA are currently negotiating the form of the revised sand supply agreement incorporating the revisions provided for in the LOU. The Corporation expects that the revised sand supply agreement will be executed by Pure USA and Legacy on the closing of the purchase and sale of Legacy.

The closing of the purchase and sale of Legacy was expected to close on or before November 10, 2007; however, the Corporation has been advised that the closing has been delayed due to the complexity of the transaction and the multitude of affected parties to the transaction. The Corporation understands that the Purchaser and the Legacy owners are continuing to negotiate and finalize the sale and closing documentation for the transaction. It is expected that the transaction will close shortly after the completion of such negotiations and the finalization of the sale and closing documentation. As a result, Pure USA's legal action against Legacy remains outstanding. Upon the closing of the purchase and sale of Legacy, Pure USA expects to enter into the revised sand supply agreement with Legacy and discontinue its legal action against Legacy. Pure USA expects to receive sufficient quantities of fracturing sand to meet its current anticipated fracturing sand requirements for the term of the revised sand supply agreement.

Critical Accounting Estimates

Note Receivable

The Corporation measures the note receivable for impairment based on the future expectations of cash receipts and the value of the outstanding principal by assessing the cash flow generating capability of the investment. Consideration is given as to whether a decline in recent or future cash flows is regarded as continuing for an extended period of time or is temporary.

During the 2007 second quarter, the Corporation recorded an allowance for loan impairment of $4.2 million reducing the carrying amount of the note receivable to $1.1 million, representing the estimated fair value of expected future cash flows and the underlying security. As a condition of entering into the revised terms of the sand supply agreement, Pure USA expects to be repaid the outstanding balance of its US$5.2 million loan to Legacy. The allowance for loan impairment will be reversed to reflect the increase in the fair value of the note receivable once the cash is received by the Corporation.

Contingency

Pure USA has been named in a lawsuit commenced by former employees claiming damages. Pure USA has made an offer to settle for US$0.1 million which has been recorded as a liability in the financial statements. The former employees have rejected the settlement and the occurrence of further liability is not determinable at this time.

Accounting Policies

The Corporation prepares its financial statements in accordance with GAAP. Except as discussed below, accounting policies have been applied consistently during all periods included in the financial statements. Certain information of the previous period has been reclassified to conform to the presentation adopted in the current year.

Change in Accounting Policy

Significant changes in economic facts and circumstances have indicated that the Corporation's foreign operations in the United States require reclassification from integrated to self-sustaining operations. The US Operations grew significantly and will no longer require day-to-day financial assistance from the Corporation. As a result, the Corporation has prospectively changed to the current rate method of foreign currency translation from the temporal method for consolidating the US Operations. The exchange gain or loss attributable to the current rate translation of non-monetary and monetary items as of the date of the change has been included as part of accumulated other comprehensive income, a separate component of shareholders' equity.

Accounting Pronouncements

Three new Canadian accounting standards have been issued which will require additional disclosure in the Corporation's financial statements commencing January 1, 2008 about the Corporation's inventories and financial instruments as well as its capital and how it is managed.

On January 1, 2007, the Corporation adopted the CICA's new accounting requirements for financial instruments and other comprehensive income. Under these new rules, the Corporation is required to measure financial assets and liabilities at fair value and include a new section in Shareholders' Equity, called Other Comprehensive Income, to report unrealized foreign exchange gains or losses on the net investment in foreign operations.

The new rules require the note receivable to be measured at fair value using the effective interest method with any adjustment of the previous carrying amount recognized as an adjustment to opening retained earnings. Future gains or losses will be recognized as the note receivable is collected. On January 1, 2007, the note receivable was re-measured at fair value and the resulting loss of $717 was charged to opening retained earnings. During the three and nine months ended September 30, 2007, the Corporation recorded interest income of $nil and $110 respectively, on the note receivable which is included in other expense (income) on the Consolidated Statement of Earnings (Loss).

Internal Controls over Financial Reporting

There have been no changes in the design of the Corporation's internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Corporation's internal controls over financial reporting during the three and nine months ending September 30, 2007.

Business Risks

A complete discussion on business risks faced by the Corporation may be found under "Risk Factors" in the Corporation's Annual Information Form dated March 8, 2007 which is available under the Corporation's profile at www.sedar.com.

Seasonality

Equipment utilization in the Canadian Operations is affected by weather conditions to varying degrees, with geographic location and type of service being a factor. The Canadian Operations tend to be more active during the winter months from November to March as the movement of heavy equipment is easier over frozen ground since many wellsite locations are only accessible during the winter months. The Canadian Operations typically experience the lowest levels of equipment utilization during April and May; however, field operations located in northern British Columbia and northern Alberta typically experience reduced activity levels throughout the summer months. All services provided by the Canadian Operations are affected by wet weather and road bans; however, the impact on the Drilling Services segment is typically more pronounced due to increased challenges encountered when moving drilling rigs.

The weather does not have as significant an impact on equipment utilization in the US Operations. Access to wellsite locations is not typically dependent on ground conditions in the US Rocky Mountain region. As a result, oilfield services industry activity in the US Rocky Mountain region does not tend to be seasonal in nature.

Outlook

The decrease in industry activity experienced in the WCSB during the first half of 2007 has persisted through the 2007 third quarter as a result of continued high natural gas storage levels and resultant low natural gas prices. Activity levels in the 2007 fourth quarter and in 2008 are expected to continue to be low as a result of the low natural gas prices and the uncertainty caused by the Alberta Royalty Review. These expectations are evidenced by PSAC's 2008 Canadian Drilling Forecast, which shows a decline in forecasted Canadian drilling activity from 17,550 wells in 2007 to 14,500 wells in 2008, representing a 17% decrease. PSAC also forecasts a decrease in the number of natural gas wells drilled from 9,404 in 2007 to 6,215 in 2008, representing a decline of 33%. Management will continue to monitor the cost structure of the Canadian Operations and will take appropriate steps to address the cost structure as industry activity levels warrant.

Activity levels in the US Rocky Mountain region have not declined in the same manner as experienced in the WCSB and other producing regions of the United States. Management expects the continued strengthening of financial results from US Completion Services as a result of the anticipated: continuation of high utilization and margins experienced in the US Production Testing division; continued increases in utilization for the US Logging and Perforating division; and increases in utilization for the Fracturing division. Management expects that the anticipated resolution of the problems associated with the sand supply agreement will result in increased utilization of the fracturing equipment in 2008 as it will provide the US Completion Services with the opportunity to enter into additional service contracts with customers for the provision of fracturing services for the 2008 contract year and beyond. Management believes that US Completion Services continues to gain customer and market acceptance for all of its services in the US Rocky Mountain region.



Summary of Quarterly Results

----------------------------------------------------------------------------
($ millions,
except per share 2007 2006 2005
amounts, unaudited) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
----------------------------------------------------------------------------
Revenue $ 31.5 $ 16.5 $ 46.1 $ 34.9 $ 35.4 $ 22.9 $ 42.1 $ 35.3
Net income /
(loss) 0.9 (9.3) 3.8 2.8 3.3 (0.2) 7.2 5.7
Earnings / (loss)
per share
Basic $ 0.05 $(0.58)$ 0.24 $ 0.17 $ 0.21 $(0.02)$ 0.49 $ 0.47
Diluted $ 0.05 $(0.58)$ 0.24 $ 0.17 $ 0.20 $(0.02)$ 0.47 $ 0.45
----------------------------------------------------------------------------


Q3 2007

- Weak industry activity levels continued in the WCSB resulting in a significant reduction in revenue and operating results for Canadian Completion Services and Drilling Services.

- US Completion Services' Production Testing division produced another quarterly record for revenue and income before income taxes.

- US Completion Services' Fracturing division's financial results continue to be hampered by fracturing sand supply.

- Sale of rig 1 for proceeds of $5 million. The proceeds have been used to commence the construction of rig eleven.

- One-time severance and termination costs of $0.7 million were recorded during the quarter.

Q2 2007

- Weak industry activity levels continued in the WCSB resulting in a significant reduction in revenue and operating results for Canadian Completion Services and Drilling Services.

- US Completion Services' Production Testing division produced another record quarterly revenue and income before income taxes during the quarter.

- US Completion Services' Fracturing division's financial results continue to be hampered by fracturing sand supply.

- Corporate segment recorded an allowance for loan impairment increasing the net loss by $4.2 million as a result of the deterioration in the credit quality of the Corporation's fracturing sand supplier.

Q1 2007

- Weaker industry activity levels continued in the WCSB resulting in a reduction in revenue and operating results for Canadian Completion Services and Drilling Services.

- Drilling Services' Motorworks Rentals division substantially increased revenue due to strong equipment utilization during the quarter combined with significant growth in rental equipment capacity and its fully operational service facility.

- Drilling Services' Quintera Drilling division added rig 10, a deeper double rig, to its rig fleet.

- US Completions Services' Production Testing division produced record quarterly revenue and income before income taxes during the quarter.

- US Completion Services' Fracturing division completed 23 jobs during the quarter and received delivery of its second fracturing spread. Fracturing sand delivery delays resulted in an operating loss during the quarter.

Q4 2006

- Weaker industry activity levels continued in the WCSB resulting in a reduction in revenue and operating results for Canadian Completion Services and Drilling Services.

- US Completion Services' Fracturing division commenced operations in December 2006 with one fracturing spread.

- Drilling Services' Motorworks Rentals division substantially increased revenue due to the significant growth in rental equipment and the opening of its service facility.

- Canadian Completion Services added one mini-logger to its Logging and Perforating division and five production testing units to its Production Testing division.

- US Completion Services added one production testing unit to its Production Testing division.

- Drilling Services added rig 9, a deeper double rig, to its rig fleet and 21 mud motors to its drilling rental fleet.

Q3 2006

- Weaker industry activity levels, particularly in the shallow gas directed regions, were experienced in the WCSB during the quarter as a result of lower natural gas prices, reducing revenue and operating results for Canadian Completion Services and Drilling Services.

- Weak operating results were experienced in US Completion Services as the US Production Testing division's operating results improved relative to the third quarter levels, but remained below management's expectations and the US Logging and Perforating division recorded an operating loss.

- Canadian Completion Services added one mini-logger to its Logging and Perforating division and three production testing units to its Production Testing division.

- US Completion Services added three production testing units to its Production Testing division.

- Drilling Services adds rig 8, a single rig, to its rig fleet and two mud motors to its drilling rental fleet.

Q2 2006

- The results for the quarter reflected the impact of spring break-up, which historically hampers activity in Canadian Completion Services and Drilling Services.

- Weak operating results were experienced in the US Completion Services as its Production Testing division's operating results were reduced due to additional costs related to the recruitment and training of staff and an operating loss recorded by its Logging and Perforating division.

- Canadian Completion Services added one production testing unit to its Production Testing division.

- US Completion Services' Logging and Perforating division commenced operations with two electric line wireline units.

- Drilling Services added 12 mud motors to its drilling rental fleet.

Q1 2006

- New corporate quarterly highs for revenue, EBITDA, net income and earnings per share were established, exceeding the previous record set during Q4 2005.

- Strong industry activity levels in the WCSB resulted in strong equipment utilization for an expanded equipment fleet and combined with a favourable pricing environment resulting in record financial results for Canadian Completion Services and Drilling Services.

- Good utilization for an expanded US Completion Services' Production Testing equipment fleet resulted in improved US Completion Services financial results.

- US Completion Services added two production testing units to its Production Testing division.

- Drilling Services added rig 7, a single rig, to its rig fleet and 13 mud motors to its drilling rental fleet.

Q4 2005

- New corporate quarterly highs for revenue, EBITDA, net income and earnings per share were established, exceeding the previous record set during Q3 2005.

- Strong industry activity levels in the WCSB resulted in strong equipment utilization for an expanded equipment fleet and combined with a favourable pricing environment resulting in record financial results for Canadian Completion Services and Drilling Services.

- Canadian Completion Services' Multiline division experienced stronger operating results as it began to make meaningful inroads into the deep critical sour market. Stronger operating results continued in fiscal 2006.

- US Completion Services revenue and income before income taxes increased significantly as equipment capacity additions and strong industry activity levels combined to produce increased results.

- Motorworks Drilling Solutions Inc. was acquired during the quarter, introducing the Corporation to the drilling rentals business.

- Canadian Completion Services added three production testing units to its Production Testing division.

- US Completion Services added three production testing units to its Production Testing division.

- Drilling Services added rigs 5 and 6, a single and a double rig, respectively to its rig fleet.

Non-GAAP Disclosure

EBITDA does not have a standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other issuers. Management believes that, in addition to net income, EBITDA is a useful supplemental measure. EBITDA is provided as a measure of operating performance without reference to financing decisions and income tax impacts, which are not controlled at the operating management level. The following is a reconciliation of EBITDA, as used in this MD&A, to net income, being the most directly comparable measure calculated in accordance with GAAP.



----------------------------------------------------------------------------
Three Months ended Nine Months ended
($ millions, except per September 30, September 30,
share amounts) 2007 2006 2007 2006
----------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
EBITDA $ 4.2 $ 7.4 $ 3.1 $21.4
Deduct:
Depreciation and
amortization 3.1 2.3 9.2 6.1
Interest expense 0.6 0.2 1.7 0.4
Income taxes (1) (0.4) 1.6 (3.2) 4.6
Net income (GAAP financial
measure) 0.9 3.3 (4.6) 10.3
----------------------------------------------------------------------------

(1) Income taxes consist of current income taxes and future income taxes.


Forward-Looking Statements

Certain statements in this MD&A may constitute "forward-looking information" which involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this MD&A, such information uses such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", "forecast", "project" and other similar terminology. This information reflects the Corporation's current expectations regarding future events and operating performance and speaks only as of the date of this MD&A. Forward-looking information involves significant risks and uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, including, but not limited to, the factors discussed below. Although the forward-looking information contained in this MD&A is based upon what management of the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with this forward-looking information. This forward-looking information is provided as of the date of this MD&A, and, subject to applicable securities laws, the Corporation assumes no obligation to update or revise such information to reflect new events or circumstances.

In particular, this MD&A contains forward-looking information pertaining to the following: capital expenditure programs; financing of the Corporation's activities including capital expenditures, supply and demand for oilfield services and industry activity levels, commodity prices, dependence on suppliers, dependence on personnel, collection of accounts receivable, expectations regarding market prices and costs, expansion of services in Canada and the United States and competitive conditions.

The Corporation's actual results could differ materially from those anticipated in the forward-looking information as a result of the following factors: general economic conditions in Canada and the United States; demand for oilfield services during drilling and completion of oil and natural gas wells; volatility in market prices for oil and natural gas and the effect of this volatility on the demand for oilfield services generally; competition; liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations; sourcing, pricing and availability of raw materials, consumables, component parts, equipment, suppliers, facilities, and skilled management, technical and field personnel; ability to integrate technological advances and match advances of competition; availability of capital; uncertainties in weather and temperature affecting the duration of the oilfield service periods and the activities that can be completed; changes in legislation and the regulatory environment, including uncertainties with respect to implementing the Kyoto Protocol; and the other factors considered under "Risk Factors" in the Corporation's Annual Information Form dated March 8, 2007 which is available under the Corporation's profile at www.sedar.com.

Contact Information

  • Pure Energy Services Ltd.
    Kevin Delaney
    President and CEO
    (403) 262-4000
    Email: kdelaney@pure-energy.ca
    or
    Pure Energy Services Ltd.
    Michael Baldwin
    Chief Financial Officer
    (403) 262-4000
    Email: mbaldwin@pure-energy.ca
    or
    Pure Energy Services Ltd.
    #300, 1010 - 1st Street S.W.
    Calgary, Alberta T2R 1K4
    (403) 262-4000
    (403) 262-4005 (FAX)
    Website: www.pure-energy.ca