North American Energy Partners Inc.
TSX : NOA
NYSE : NOA

North American Energy Partners Inc.

November 29, 2006 17:20 ET

North American Energy Partners Announces Fiscal 2007 Second Quarter Results

ACHESON, ALBERTA--(CCNMatthews - Nov. 29, 2006) - North American Energy Partners Inc. (TSX:NOA) (NYSE:NOA) today announced fiscal 2007 Q2 results for the three and six months ended September 30, 2006.

The consolidated financial statements and accompanying Management's Discussion and Analysis relate to the newly amalgamated North American Energy Partners Inc. following the amalgamation of NACG Holdings Inc., NACG Preferred Corp. and North American Energy Partners Inc. on November 28, 2006.

"I am very excited about North American's prospects following the completion of our IPO yesterday," said Rod Ruston, President and CEO. "We are in an excellent position to expand our operations and market presence. We are heading into what is traditionally the busiest period for our business and our outlook remains positive for the balance of the fiscal year."



Second Quarter Highlights

Three months ended Six months ended
(All in $ CDN millions except September 30 September 30
for EPS & equipment hours) 2006 2005 2006 2005
-----------------------------------------
Revenue $ 130.1 $ 124.0 $ 268.1 $ 228.4
Segment Profit $ 22.2 $ 16.1 $ 54.9 $ 29.9
Operating Income $ 9.7 $ 15.9 $ 32.8 $ 21.1
Net Income (Loss) $ (4.8) $ 11.5 $ 13.1 $ (37.7)
EPS (basic) (0.26) 0.62 0.71 (2.03)
Consolidated EBITDA $ 15.7 $ 21.3 $ 47.3 $ 30.0
Capital Expenditures $ 10.0 $ 8.0 $ 19.3 $ 13.8
Equipment Hours 236,711 234,649 480,716 420,399


Summary

All comparisons are to the three month period ending September 30, 2005.

Revenue was $130 million, a $6 million increase from the prior period as a result of an increased volume of work in the Mining and Site Preparation and Piling segments, offset by lower activity levels in the Pipeline segment. Segment operating profit also increased by $6 million, with operating margins improving in both Mining and Site Preparation and Piling.

- Mining and Site Preparation revenue increased by $7 million to $100 million as the ramp-up of the overburden removal contract with CNRL continued in the quarter. Segment profit increased by $3 million from $9.5 million to $12.5 million.

- The Piling division recorded quarterly revenue of $27 million, a $5 million improvement over 2005. Segment profit also increased significantly, rising from $4.8 million to $9.3 million. Intensified demand for piling services and consistent expansion in the scope of existing projects are the reasons for this steady growth. An example of our new service offerings is demonstrated with the recent acquisition of Midwest Micropile, and the continued use of Continuous Flight Auger technology in western Canada.

- Pipeline revenue was $3 million, a $5 million decline, which resulted in a $1.4 million decrease in segment operating profit from $1.8 million to $0.4 million. This was attributed to less work performed for our major customer and the seasonality of pipeline work. The division commenced a new 40 kilometer twin pipeline project for another large customer late in the quarter.

Despite higher operating segment profits, operating income was lower at $9.7 million as compared to $15.9 million in 2005. We incurred non-recurring charges in equipment costs and general and administrative costs. In anticipation of the growth to come, spending on fleet expansion, tires and the up-keep of our maintenance facilities were also contributing factors to the lower operating earnings.

Net loss for the period was $4.8 million as compared with net income of $11.5 million for the corresponding period in 2005. The primary reasons for the lower operating earnings were higher non-cash interest costs associated with the Series B preferred shares, which were retired with the completion of the IPO, the impact of tax changes and unrealized loss on derivative instruments.

Our consolidated financial statements and accompanying Management's Discussion and Analysis for the three and six months ended September 30, 2006 were filed today with securities regulators in Canada and the United States and are available at www.sedar.com and www.sec.gov.

Conference Call



We will be conducting a conference call on November 30, 2006 at 7:00 a.m.
(MT) to review results. To participate in the call, please dial:

Local or Overseas: 780-424-5694
Toll-free: 1-888-458-1598
Participants Code: 30442#

For instant replay access available until midnight Wednesday, December 6,
2006, please dial:

Local or Overseas: 403-232-0933
Toll-free: 1-877-653-0545
Participant Code: 349808#


A live and on-demand webcast will also be provided in the Investor Relations section of our website at www.nacg.ca.

Certain statements contained in this news release may include forward-looking information with respect to North American Energy Partners Inc.'s operations and future financial results. Such statements are based on current expectations and are subject to a number of risks and uncertainties. As a result, actual results may differ materially form those contained in such statements. For further information, please refer to the disclosure documents filed by North American Energy Partners Inc. with the securities regulatory authorities in Canada and the United State. These documents are available at www.sedar.com and www.edgar.com.

North American Energy Partners Inc. is one of the largest providers of mining and site preparation, piling and pipeline installation services in western Canada. For over 50 years, we have provided services to large oil, natural gas and resource companies, with a principal focus in the Canadian oil sands. We continue to maintain one of the largest independently owned equipment fleets in the region.


Contact Information

  • North American Energy Partners Inc.
    Vincent Gallant
    Vice President, Corporate & Secretary
    (780) 960-2255
    (780) 960-7167 (FAX)
    Email: vgallant@nacg.ca