Central Alberta Well Services Corp.
TSX VENTURE : CWC

Central Alberta Well Services Corp.

November 20, 2006 15:07 ET

Central Alberta Well Services Announces Positive Quarterly Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 20, 2006) -

Not for distribution to United States newswire services or for dissemination in the United States.

Central Alberta Well Services Corp. (TSX VENTURE:CWC) ("Central Alberta" or the "Company") is pleased to announce the Company's unaudited consolidated quarterly results for the three and nine months ended September 30, 2006. The Company's financial statements and Management's Discussion & Analysis, together with all previous public filings are available on SEDAR at www.sedar.com. Additional information is also available on the Company's website at www.cawsc.com. The following are certain financial highlights:



Consolidated Highlights
Nine months Seven months
Three months ended ended ended
--------------------------- ------------- -------------
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
----------------------------------------------- ---------------------------
(unaudited)

Revenues $ 13,289,105 $ 552,068 $ 25,855,698 $ 1,030,460
Operating costs 7,908,146 362,207 15,317,437 784,837
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5,380,959 189,861 10,538,261 245,623
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40.5% 34.4% 40.8% 23.8%
General and
administrative
expenses 1,294,871 537,161 3,680,141 1,099,206
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EBITDA(1) 4,086,088 (347,300) 6,858,120 (853,583)
----------------------------------------------- ---------------------------
EBITDA per share(1)
Basic and diluted 0.10 (0.08) 0.18 (0.25)
Stock based
compensation 261,872 128,312 1,266,007 128,312
Interest 786,669 633,612 1,541,658 1,052,395
Depreciation and
amortization 2,046,070 78,342 4,599,994 200,240
Net income (loss) 182,751 (1,187,566) (475,768) (2,234,530)
----------------------------------------------- ---------------------------

Funds from
operations(2) 3,038,009 (755,459) 5,231,248 (1,528,258)
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Funds from
operations per share(2)
Basic and diluted 0.07 (0.17) 0.14 (0.45)
Purchase of
property and
equipment $ 6,476,954 $ 2,780,272 $ 35,814,913 $ 9,659,836
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(1) EBITDA is calculated from the statement of income (loss) as revenue
less operating costs and general and administrative expenses, exclusive of
stock based compensation costs, and is used to assist management and
investors in assessing the Company's ability to generate cash from
operations. EBITDA is a non-GAAP measure and does not have any
standardized meaning prescribed by GAAP and may not be comparable to
similar measures provided by other companies.

(2) Funds from operations is defined as cash from operating activities
before changes in non-cash working capital. Funds from operations and funds
from operations per share are measures that provide investors additional
information regarding the Company's liquidity and its ability to generate
funds to finance its operations. Funds from operations and Funds from
operations per share do not have any standardized meaning prescribed by
GAAP and may not be comparable to similar measures provided by other
companies.


Central Alberta posted strong results for Q3 2006 and generated significant year over year improvements. Revenues increased by $5.6 million or 74% over Q2 2006, reflecting the expanded equipment fleet, seasonal weather patterns and the continuing market impact of the Company's comprehensive service lines. The Company generated EBITDA of $4.1 million for the quarter, an increase of $2.9 million or 242% over Q2 2006 and EBITDA of $6.9 million for the nine months ended September 30, 2006. Operating margins improved to 40.5% for Q3 2006 from 38.2% for Q2 2006 as the Company continued to expand and deploy its well service fleet.

The Company generated quarterly net income for the second time in its short history, of $0.2 million after a non-cash charge of $0.3 million for stock based compensation relating to the Company's stock option program. This option program is a key component of Central Alberta's employee retention strategies. Options are not treated as an executive perquisite but are provided to every employee of the organization.

"Despite a very choppy market place, we continue to see good utilization rates for our equipment", reports Darryl Wilson, President and CEO. "This Company has put together a very strong employee team and a fleet of efficient and mobile equipment. We are poised to address the demands of a dynamic market place with a solid management and operational team that will continue to deliver bottom-line performance."



Capital Structure For the Quarter Ended
---------------------------------------------------------------------------
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2006 2006 2006 2005 2005
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Total assets $108,967,082 $91,475,091 $81,371,149 $27,173,800 $20,338,246
Total
liabilities 63,388,302 46,174,241 35,742,653 8,578,656 14,684,198
Long term debt 16,937,611 17,182,610 14,040,639 4,950,000 13,595,425
Net debt (1) 36,985,019 32,145,334 12,565,396 2,136,360 6,850,334
Future income
tax 2,301,000 1,674,000 3,913,000 - -
Shareholders'
equity $ 45,578,780 $45,300,850 $45,628,496 $18,595,144 $ 5,654,048
Long term debt
to equity 0.37 0.38 0.31 0.27 2.40
Shares
outstanding 41,718,232 41,718,232 41,716,565 27,080,138 7,235,138


(1) Net Debt is calculated as long term debt less working capital and has
been provided to assist investors to analyze the Company's capital
structure. It is a non-GAAP measure and does not have any standardized
meaning prescribed by GAAP and may not be comparable to similar measures
provided by other companies.


The Company's capital structure includes the consolidated financial positions of Central Alberta and its three wholly owned operating subsidiaries.

Highlights for the Quarter

- Integrated the strategic acquisitions of SSI Special Services, Precise Energy Services and Vertical Rentals into the Central Alberta operations.

- Expanded the service fleet to 15 state-of-the-art service rigs, 5 coil tubing units, 5 snubbing units, 10 nitrogen tankers and pumpers, 10 pressure tanks and a range of specialized oilfield rental equipment.

- Commenced the development of a new field location in Whitecourt, Alberta with an expected start up during Q1 2007. This site is geared towards expanding the Company's service reach strongly into the northern oil and gas fields.

The Company also announces today that Thomas E. Lewis has resigned as Chief Financial Officer to pursue other business interests. Mr. Lewis will remain in place until the end of November and will be available to oversee transitional issues until December 31, 2006 while the Company recruits a successor. The Company is currently interviewing a number of potential candidates for this position.

"We wish to thank Tom for his contributions during this formative time in our Company's development and wish him well in his future endeavors" stated Darryl Wilson.

The Company's financial statements and Management's Discussion & Analysis, together with all previous public filings, are available on SEDAR at www.sedar.com. Additional information is also available on the Company's website at www.cawsc.com.

Central Alberta is headquartered in Red Deer, Alberta with an additional facility in eastern Albert. The Company provides oilfield services, including well servicing, coil tubing, snubbing, nitrogen, well testing and oilfield equipment rentals to oil and gas companies operating in the Western Canadian Sedimentary Basin.

READER ADVISORY

This press release may include forward-looking statements and assumptions regarding the Company's strategies, future operations, expected results, financial sources, and industry outlook and may discuss certain issues, risks and uncertainties that can be expected to impact on any of such matters. By their nature, forward-looking statements are subject to numerous risks and uncertainties that can significantly affect future results. Actual future results may differ materially from those assumed or described in such forward-looking statements as a result of the impact of issues, risks and uncertainties whether described herein or not, which the Company may not be able to control. The reader is therefore cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any intention or obligation to update or revise these forward-looking statements, as a result of new information.

Common Shares Issued: 41,718,232

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release and has neither approved nor disapproved the contents of this release.

Contact Information

  • Central Alberta Well Services Corp.
    Darryl Wilson
    President and Chief Executive Officer
    (403) 341-3933
    Email: darrylwilson@cawsc.com
    or
    Central Alberta Well Services Corp.
    Thomas Lewis, CA
    Chief Financial Officer
    (403) 341-3933
    Email: tomlewis@cawsc.com
    or
    Central Alberta Well Services Corp.
    6763 76th Street
    Red Deer, AB. T4P 3R7
    Website: www.cawsc.com