Central Alberta Well Services Corp.
TSX VENTURE : CWC

Central Alberta Well Services Corp.

June 01, 2006 15:46 ET

Central Alberta Well Services Announces Positive Results

CALGARY, ALBERTA--(CCNMatthews - June 1, 2006) - Central Alberta Well Services Corp. (TSX VENTURE:CWC) ("Central Alberta" or the "Company") is pleased to announce the Company's quarterly financial results for the three months ended March 31, 2006.



---------------------------------------------
Operating Results for the Three Months Ended
---------------------------------------------
March 31, December 31, September 30,
2006 2005 2005
------------------------------------------------------------------------
(unaudited)

Revenues 4,931,474 1,946,700 552,068
------------------------------------------------------------------------
Operating costs 2,689,745 1,198,314 362,207
------------------------------------------------------------------------
2,241,729 748,386 189,861
---------------------------------------------
45.5% 38.4% 34.4%

General and administrative 704,863 674,252 537,161
------------------------------------------------------------------------
Stock based compensation 572,220 410,517 128,312
------------------------------------------------------------------------
Interest 119,595 (262,717) 633,612
------------------------------------------------------------------------
Depreciation and amortization 741,961 560,076 78,342
------------------------------------------------------------------------

Net Income (Loss) 103,090 (633,742) (1,187,566)
------------------------------------------------------------------------
------------------------------------------------------------------------

EBITDA (1) 845,051 (336,383) (475,612)
------------------------------------------------------------------------

Capital expenditures 9,262,272 8,754,760 2,780,272
------------------------------------------------------------------------

(1) EBITDA is calculated from the statement of loss as revenue less
operating costs and general and administrative expenses and is used
to assist management and investors in assessing the Company's
ability to generate cash from operations. EBITDA is a non-GAAP
earnings measure that does not have any standardized meaning
prescribed by GAAP and may not be comparable to similar measures
provided by other companies.


Central Alberta posted record results for Q1 2006 and is poised for continued growth and bottom line performance through the balance of 2006. Revenues increased by 153% and operating margins improved to 45% as the Company continued to expand and deploy its well service fleet, reaching critical mass and realizing hourly rates and utilization percentages that exceeded internal expectations.

The Company generated quarterly net income for the first time in its short history and EBITDA that exceeded the combined negative EBITDA of the previous two quarters. Net income of $0.1 million was after non-cash charges of $0.6 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.

"We are quietly confident about the outlook for Central Alberta going forward" reports Darryl Wilson, President and CEO. "From a standing start at March, 2005 to the end of March, 2006, we have delivered on our business plan and built a Company with over $80 million of assets and 170 employees across four operating divisions with a solid management and operational team that will deliver bottom-line performance."



---------------------------------------------
Capital Structure For the Quarter Ended
------------------------------------------------------------------------
March 31, December 31, September 30,
2006 2005 2005
------------------------------------------------------------------------
Total assets 81,371,149 27,173,800 20,338,246
------------------------------------------------------------------------
Total liabilities 35,742,653 8,578,656 14,684,198
------------------------------------------------------------------------
Long term debt 14,040,639 4,950,000 13,595,425
------------------------------------------------------------------------
Future income tax 3,913,000 - -
------------------------------------------------------------------------
Shareholders' equity 45,628,496 18,595,144 5,654,048
------------------------------------------------------------------------
Long term debt to equity 0.31 0.27 2.40
------------------------------------------------------------------------

Shares outstanding
At end of period 41,716,565 27,080,138 7,235,138
------------------------------------------------------------------------
Weighted average 28,457,574 20,282,878 4,553,474
------------------------------------------------------------------------


The Company's capital structure changed dramatically as at March 31, 2006. It includes the consolidated financial positions of Central Alberta and its three newly acquired operating subsidiaries. The consideration for these acquisitions consisted of $4.0 million cash and $21.4 million of equity, partially accounting for the large increase in shareholders' equity.

Highlights for the Quarter

- Completed the strategic acquisitions of SSI Special Services, Precise Energy Services and Vertical Rentals. These accretive acquisitions provide operational synergies, market opportunities, a stronger employee base and an enhanced service and product line.

- Expanded the service fleet from seven service rigs and coil tubing units at year end to eleven service rigs and coil tubing units, five snubbing units, eight nitrogen tankers and pumpers, nine pressure tanks and a range of specialized oilfield rental equipment.

- Raised $5.1 million on an equity issue that was used to continue the Company's capital acquisition programs.

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 Company is also pleased to announce that its Annual Meeting of Shareholders will be held on Tuesday, June 13, 2006 at 10 a.m. (Calgary time) in the Penthouse at the Fairmont Palliser Hotel, located at 133 - 9th Avenue SW, Calgary, Alberta.

Central Alberta Well Services Corp. is based in Red Deer, Alberta and 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: 41,716,565

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.
    Tom Lewis
    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