Strad Energy Services Announces 2010 Fourth Quarter and Year End Results

CALGARY, ALBERTA--(Marketwire - March 8, 2011) - NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S. The news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Cautionary Statement Regarding Forward-Looking Information and Statements" later in this news release. "This past year has been significant in the development of Strad," commented Henry van der Sloot, CEO of Strad Energy Services Ltd ("Strad" or the "Company"). "In 2010 the Company achieved record financial results, increasing revenue by 105% and EBITDA by 483% compared to 2009. This growth was all achieved through organic initiatives. This growth was driven by the robust improvements in drilling activity across North America, the substantial changes to drilling equipment requirements resulting from increased horizontal drilling and multi-stage fracturing, and the successful penetration of Strad into key new resource areas across North America." Highlights in the year include: /T/ -- Record Earnings before interest, taxes, depreciation and amortization ("EBITDA(1)" ) of $29.2 million for 2010, compared to $5.0 million in 2009; -- EBITDA return on average total Drilling Services assets for the year ended December 31, 2010 of 30% ; -- Successful deployment of $42.9 million of capital assets (includes $2.4 million of assets acquired under capitalized leases), the largest capital program in the Company's history; -- Expansion of its customer base beyond the Western Canadian Sedimentary Basin ("WCSB") into some of the most active areas in the United States, namely the Marcellus in Pennsylvania, the Bakken in North Dakota, the Eagle Ford in Texas and various areas within the western United States Rockies; -- Initial public offering raising gross proceeds of $45.0 million, the Company was listed on the Toronto Stock Exchange in November under the symbol "SDY". 1. EBITDA is not a recognized financial measure under Generally Accepted Accounting Principles ("GAAP); see "Non-GAAP Measures " in this report /T/ In addition to capitalizing on the general increase in industry activity, Strad has successfully leveraged off of the dramatic changes in drilling equipment requirements presented by horizontal drilling and multi-stage fracturing. The increased demand for greater quantities of equipment has been matched by increased demand for the highest standards of safety and environmental stewardship. Strad's focus on safety, service, environmental solutions, and its unique ability to meet these demands through its broad base of locations and proprietary manufacturing capabilities make Strad a preferred vendor for its customers. Andy Pernal, President of Strad commented, "As the capital intensity of our business increases, and the demands for safety and environmental protection become more onerous, the competitive landscape of our business is changing. It now requires a large and sophisticated infrastructure to successfully meet the standards set by customers. Fortunately, Strad is at the forefront of these changes, and as a result, is in a position to further increase its market share going forward." SELECTED FINANCIAL AND OPERATING HIGHLIGHTS /T/ Three months ended December 31st Years ended December 31st ------------------------------------------------------------- ($000's except per share % amounts) 2010 2009 % Change 2010 2009 Change ------------------------------------------------------------- Revenue $ 44,949 $ 20,468 119.6 $ 153,632 $ 75,096 104.6 EBITDA (1) 8,468 2,110 301.3 29,167 5,005 482.8 Net Income (Loss) 2,514 (11,403) N/M 7,391 (16,938) N/M Funds provided by Operations (2) 8,022 1,979 305.4 26,829 3,948 579.6 EBITDA - per share Basic 0.32 0.10 205.3 1.36 0.25 448.7 Diluted 0.28 0.10 169.7 1.20 0.25 384.3 Capital Spending (3) 12,244 4,277 186.3 42,925 8,765 389.7 Funds provided by Operations - per share Basic 0.30 0.10 208.4 1.25 0.20 539.9 Diluted 0.27 0.10 172.4 1.11 0.20 464.7 Net Income (Loss) - Per Share Basic 0.10 (0.57) N/M 0.35 (0.84) N/M Diluted 0.09 (0.57) N/M 0.32 (0.84) N/M Common Shares Outstanding ('000's) 37,246 20,149 N/M 37,426 20,149 N/M (1) EBITDA is not a recognizable measure under GAAP. See "Non-GAAP Measures". (2) Funds from operations exclude changes in working capital. Funds from operations is not a recognized measure under GAAP. See "Non-GAAP Measures". (3) Includes assets acquired under capital lease. N/M - calculation not meaningful /T/ FINANCIAL POSITION AND RATIOS /T/ December 31, ----------------------------------------------- ($000's except ratios) 2010 2009 ----------------------------------------------- Working Capital (1) 34,313 6,076 Funded Debt (2) 9,944 37,772 Total Assets 192,816 131,775 Funded Debt to EBITDA 0.3 7.5 (1)Working capital is calculated as current assets less current liabilities. See "Non-GAAP Measures". (2)Funded debt includes bank indebtedness plus current and long-term portion of debt plus current and long-term obligations under capital lease. See "Non-GAAP Measures". /T/ Summary for the three months ended December 31, 2010: /T/ -- Revenue increase of 120% over 2009; 2010 revenue was $44.9 million versus $20.5 million in 2009. -- EBITDA increase of 301% over 2009; 2010 EBITDA was $8.5 million or 19% of revenue versus $2.1 million or 10% of revenue in 2009. -- Diluted earnings per share of $0.09 in the fourth quarter compared to a loss per share of $0.57 in 2009. -- Capital expenditures for the three months ended December 31, 2010 totalled $12.2 million, $6.2 million allocated to Drilling Services in the United States. -- Successful initial public offering raising gross proceeds of $45.0 million. /T/ Summary for the year ended December 31, 2010: /T/ -- Revenue increase of 105% over 2009; 2010 revenue was $153.6 million versus $75.1 million in 2009. Revenue attributable to the United States increased exponentially over 2009 totalling $31.4 million. -- EBITDA increase of 483% over 2009; 2010 EBITDA was $29.2 million or 19% of revenue versus $5.0 million or 7% of revenue in 2009. -- Diluted earnings per share of $0.32 compared to a loss per share of $0.84 in 2009. -- Strad's largest deployment of capital in its history with $42.9 million of capital purchases (including assets of $2.4 million acquired under capitalized leases). A total of $40.0 million of capital was allocated to the Drilling Services segment of which $25.4 million was placed in the United States. -- Private convertible debenture issue in June raising gross proceeds of $16.6 million. The debentures were converted to 5.6 million shares concurrent with the Company's initial public offering. -- Strong balance sheet with a funded debt to EBITDA ratio of 0.3 as of December 31, 2010. /T/ Strad reported net income of $2.5 million or $0.09 per diluted share for the three months ended December 31, 2010 compared to a net loss of $11.4 million or $0.57 per diluted share for the three months ended December 31, 2009. Revenue for the fourth quarter of 2010 totalled $44.9 million versus $20.5 million for the fourth quarter of 2009. EBITDA was $8.5 million for the fourth quarter of 2010 compared to $2.1 million for the fourth quarter of 2009. For the year ended December 31, 2010, Strad reported net income of $7.4 million or $0.32 per diluted share compared to a net loss of $16.9 million or $0.84 per diluted share for the year ended December 31, 2009. Revenue for the year was $153.6 million compared to $75.1 million for 2009. EBITDA totalled $29.2 million for 2010 compared to $5.0 million for 2009. The Company continued to execute its strategic plan of geographic and commodity diversification, service excellence and disciplined growth in 2010. Strad participates in key unconventional resource plays with a balanced mix of business associated with oil, liquids rich natural gas and dry natural gas. Increased horizontal drilling and multi-stage fracturing have pushed demand for Strad's rental equipment. The Company effectively deployed a capital program of $42.9 million (including $2.4 million of assets acquired under capital lease) in the year, the largest in its history, in a methodical manner ensuring capital spending was financed appropriately and on assets that produced the best financial returns. OUTLOOK Demand for energy is expected to rise as the global economies continue to recover and move out of the recession. Increased liquidity in the capital markets and higher oil commodity prices are providing many of Strad's customers with capital to expand their exploration and development programs thereby increasing demand for the Company's products and services. It is anticipated that activity levels experienced in Q4 in the oil and natural gas industry will continue into 2011. Natural gas drilling activity is focused on resource plays that are rich in liquids ("NGL") and oil commodity prices are supporting higher drilling activity directed to oil. Management believes these two factors have offset decreased activity related to conventional dry gas. In addition to the change in commodity focus, drilling methodology has also changed. Horizontal drilling and multi-stage fracturing are being utilized more often to exploit unconventional resource plays. These techniques require more advanced planning and equipment on the well site which is positive for Strad. In addition, the Company expects the high standards of safety and environmental stewardship to continue to be a serious concern for customers, particularly in the high profile new resource areas. These higher customer expectations are expected to drive an increasing trend to single source, full service vendors like Strad. Strad believes it has the equipment and expertise to capitalize on these industry changes. Strad is committed to expanding its rental product base as demonstrated in its $42.9 million capital program in 2010 (including assets of $2.4 million acquired under capitalized leases) and its planned $66.5 million capital program in 2011. Strad is expected to deploy this capital in its strategic focus areas across North America with $40.0 million targeted at US markets. Focusing on a limited number of areas allows the Company to efficiently and effectively allocate capital with an intimate knowledge of customer and geographic requirements. Specific capital spending is targeted at increasing the number of pieces of high demand equipment and replacing assets that were previously rented from third party suppliers. By purchasing third party rented equipment, the Company will not only improve gross margin but also increase the range of equipment and services provided to customers as a fully integrated solution provider. Strad's creative design team, along with its own manufacturing capacity provide a unique advantage in controlling the quality and delivery of its capital expenditure program. Approximately 40% of the 2011 program will be manufactured at Strad facilities. Deployment of the 2011 program is on target with 40% of the new equipment expected to be in the field by the end of June. Increased recognition of Strad as an environmental solutions provider has generated significant interest in the company across North America. As regulatory agencies in Canada and the United States increase environmental standards for drilling related activity, the demand for the Company's environmental solutions is expected to increase. Notwithstanding the positive current environment, Strad is committed to maintaining a strong balance sheet and maintaining a prudent capital structure. The initial public offering completed in November of 2010 gives the Company the balance sheet strength to execute on its 2011 capital program. SEGMENTED INFORMATION Strad operates in Canada and the United States through two business segments: Drilling Services and Production Services. Drilling Services includes a comprehensive range of drilling-related products and services, including a wide range of environmental solutions. Production Services include mechanical services, production equipment packaging and electrical and instrumentation services. All divisional figures are reported based on these two segments. /T/ Three months ended December 31st Year ended December 31st ------------------------------------------------------------- ($000's) 2010 2009 % Change 2010 2009 % Change ------------------------------------------------------------- Revenue: Drilling Services 27,463 8,579 220.1 89,484 26,020 243.9 Production Services 17,486 11,889 47.1 64,148 49,076 30.7 ------------------------------------------------------------- TOTAL REVENUE 44,949 20,468 119.6 153,632 75,096 104.6 EBITDA (1) : Drilling Services 8,378 1,834 356.8 29,576 3,883 661.7 Production Services 1,295 1,276 1.5 5,063 5,140 (1.5) Corporate (1,205) (1,000) (20.5) (5,472) (4,018) (36.2) ------------------------------------------------------------- TOTAL EBITDA 8,468 2,110 301.3 29,167 5,005 482.8 (1) Non-GAAP measure. See "Non-GAAP Measures". /T/ SEGMENT REVIEW OF DRILLING SERVICES /T/ Three months ended Year ended December December 31st, 31st, --------------------------------------------------- ($000's) 2010 2009 2010 2009 --------------------------------------------------- Drilling Services Revenue 27,463 8,579 89,484 26,020 EBITDA (1) 8,378 1,834 29,576 3,883 EBITDA % 30.5% 21.4% 33.1% 14.9% Capital Expenditures(2) 11,552 4,205 40,036 7,220 Gross Capital Assets 85,733 47,724 85,733 47,724 Total Assets 126,721 72,110 126,721 72,110 Return on Average Total Assets N/M N/M 29.8% 6.4% N/M - not meaningful (1) EBITDA is not a recognized measure under GAAP. See "Non-GAAP Measures" (2) Includes assets acquired under capital lease. /T/ Revenue generated from the Company's Drilling Services segment for the three months ended December 31, 2010 increased 220% to $27.5 million versus $8.6 million for the three months ended December 31, 2009. For the year ended December 31, 2010, Drilling Services revenue of $89.5 million improved 244% when compared to revenue of $26.0 million for the year ended December 31, 2009. Revenue generated out of the United States increased to $8.5 million in Q4 2010 from $1.7 million in Q4 of 2009. For the year ended December 31, 2010, United States revenue grew to $31.4 million versus $2.4 million in 2009. Canadian Drilling Services revenue also improved; for the three months ended December 31, 2010 revenue of $19.0 million improved 175% as compared to revenue of $6.9 million for the three months ended December 31, 2009. For the year ended December 31, 2010, Canadian Drilling Services revenue of $58.1 million increased 146% as compared to $23.6 million for the prior year. Drilling Services EBITDA increased 357% to $8.4 million for Q4 2010 compared to $1.8 million for Q4 2009. Drilling Services EBITDA as a percentage of revenue increased for the three months ended December 31, 2010 to 31% from 21% for the three months ended December 31, 2009. Increased EBITDA reflects improved pricing and higher utilization rates in both Canada and the United States. Drilling Services EBITDA for the year ended December 31, 2010 of $29.6 million improved 662% versus $3.9 million for the year ended December 31, 2009. EBITDA as a percentage of revenue for the year ended December 31, 2010 of 33% increased by eighteen percentage points over 15% recorded for the year ended December 31, 2009. SEGMENT REVIEW OF PRODUCTION SERVICES /T/ Three months ended Year ended December December 31st, 31st, --------------------------------------------------- ($000's) 2010 2009 2010 2009 --------------------------------------------------- Production Services Revenue 17,486 11,889 64,148 49,076 EBITDA (1) 1,295 1,276 5,063 5,140 EBITDA % 7.4% 10.7% 7.9% 10.5% Capital Expenditures 583 5 2,580 1,389 Gross Capital Assets 16,644 15,083 16,644 15,083 Total Assets 60,955 58,143 60,955 58,143 Return on Average Total Assets N/M N/M 8.5% 7.4% N/M - not meaningful (1) EBITDA is not a recognized measure under GAAP. See "Non-GAAP Measures". (2) Includes assets acquired under capital lease. /T/ Production Services revenue improved 47% to $17.5 million for the three months ended December 31, 2010 compared to $11.9 million for the same time period in 2009. Revenue for the year ended December 31, 2010 was $64.1 million; an improvement of 31% as compared to $49.1 million for the year ended December 31, 2009. Revenue increases are due to more favorable industry conditions and the inherent demand for Strad field technicians. Production Services EBITDA for the three months ended December 31, 2010 of $1.3 million was consistent to the EBITDA for the three months ended December 31, 2009. EBITDA as a percentage of revenue decreased to 7% for the three months ended December 31, 2010 from 11% for the three months ended December 30, 2009. Natural gas compression service pricing remains at very competitive levels due to reduced activity in the conventional natural gas service market. For the year ended December 31, 2010, EBITDA of $5.1 million stayed consistent to EBITDA for the year ended December 31, 2009. EBITDA as a percentage of revenue for the year ended December 31, 2010 of 8% decreased from 11% for the year ended December 31, 2009. SEGMENT REVIEW OF CORPORATE SERVICES The Corporate segment had an EBITDA loss of $1.2 million for the fourth quarter of 2010 compared to a loss of $1.0 million for the fourth quarter of 2009. For the year ended December 31, 2010, the Corporate segment has an EBITDA loss of $5.5 million compared to a loss of $4.0 million of the year ended December 31, 2009. The quarter over quarter and year over year increase was due to higher levels of activity for the Company and growth within Strad. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2010, Strad's principal sources of liquidity include working capital of $34.3 million, a revolving demand facility of $20.0 million of which nil is drawn and all of which is available, a 364-day revolving capital expenditure facility of $19.0 million of which nil is drawn and all of which is available and a lease facility of $10.0 million of which $6.7 million is outstanding as of December 31, 2010. The net working capital position of Strad at December 31, 2010 was $34.3 million, an increase from the working capital position of December 31, 2009 by $28.2 million. The increase in working capital was due to gross proceeds received from the Company's initial public offering of $45.0 million and due to higher levels of activity which increased accounts receivable. As at December 31, 2010, the Company was in compliance with all of the Bank Facility covenants. NON-GAAP MEASURES Strad uses certain supplementary measures that do not have any standardized meaning as prescribed under generally accepted accounting principles ("GAAP") to assess performance and believes these non-GAAP measures provide useful supplemental information to the investor. These measures are further explained below. EBITDA is not a recognized measure under GAAP. Management believes that in addition to net income, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how those activities are financed or how the results are taxed. EBITDA is calculated as net income prior to interest, taxes, depreciation and amortization. EBITDA also calculates earnings prior to non-controlling interest, (gain)/loss on disposal of property plant and equipment, (gain)/loss on foreign exchange, impairment of goodwill,amortization of deferred charges and accretion of convertible debentures. Segmented EBITDA is based upon the same calculation for defined business segments, which are comprised of Drilling Services, Production Services and Corporate. Funds from operations are cash flow from operating activities excluding changes in working capital. It is a supplemental measure to gauge performance of the Company before non-cash items. Working capital is calculated as current assets minus current liabilities. Working capital is used by Management to gauge what banking facilities are available for reinvestment in the business. Additional non-GAAP measures include: Funded debt which is bank indebtedness plus current and long-term position of debt, plus current and long-term obligations under capital lease. EBITDA return on average total assets is calculated as EBITDA divided by the average of total assets at the beginning and end of the year. Reconciliation of EBITDA and Funds from operations /T/ Reconciliation of non-GAAP measures ($000's) Three Months Three Months Ended Ended Year Ended Year Ended December December December December 31st, 31st, 31st, 31st, ------------------------------------------------------- 2010 2009 2010 2009 ------------------------------------------------------- (unaudited) (unaudited) Net income (loss) 2,514 (11,403) 7,391 (16,938) Add: Depreciation and amortization 4,070 3,080 14,743 12,277 Accretion of Convertible Debenture 13 - 35 - Impairment of goodwill - 11,000 - 11,000 (Gain)/Loss on disposal of PP&E (68) 90 (129) 112 Stock option expense 15 55 193 250 Non-controlling interest 271 - 915 - Future income tax (recovery) 1,207 (821) 3,681 (2,753) ------------------------------------------------------- Funds from operations 8,022 2,001 26,829 3,948 Add: Interest expense 569 424 2,350 1,720 (Gain)/Loss on foreign exchange 414 (245) 486 80 Income tax (recovery) (522) (15) (305) (623) Amortization of deferred charges - - - 130 ------------------------------------------------------- Subtotal 8,483 2,165 29,360 1,307 Deduct: Stock option expense 15 55 193 250 ------------------------------------------------------- EBITDA 8,468 2,110 29,167 5,005 ------------------------------------------------------- ------------------------------------------------------- /T/ CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS Certain statements and information contained in this Press Release t constitute forward-looking statements. These statements relate to future events or to the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The use of any of the words "expect", "plan", "continue", "estimate", "anticipate", "targeting", "intend", "could", "might", "should", "believe", , "may", or "will" and similar expressions are intended to identify forward-looking information or statements. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this Press Release. The forward-looking information and statements included in this Press Release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements. These factors include, but are not limited to, such things as the impact of general industry conditions, fluctuation of commodity process, industry competition, availability of qualified personnel and management, stock market volatility and timely and cost effective access to sufficient capital from internal and external sources. The risks outlined above should not be construed as exhaustive. Although management of the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Accordingly, readers should not place undue reliance upon any of the forward-looking information set out in this Press Release. All of the forward looking statements of the Company contained in this Press Release are expressly qualified, in their entirety, by this cautionary statement. Except as required by law, the Company disclaims any intention or obligation to update or revise any forward-looking information or statements, whether the results of new information, future events or otherwise. Consolidated Balance Sheet As at December 31, 2010 and 2009 (Unaudited) /T/ 2010 2009 $ $ Assets Current assets Cash and cash equivalents 8,416 - Accounts receivable 41,700 18,547 Inventory 15,171 17,935 Prepaid expenses and deposits 2,928 981 Income taxes receivable 241 195 Future income taxes 697 2,447 --------------------------------- 69,153 40,105 Property, plant and equipment 71,777 41,058 Intangible assets 11,104 14,608 Goodwill 36,004 36,004 Future income taxes 4,778 - --------------------------------- 192,816 131,775 --------------------------------- --------------------------------- Liabilities Current liabilities Bank indebtedness - 13,249 Accounts payable and accrued liabilities 26,755 13,117 Deferred revenue 3,387 119 Income taxes payable 36 - Current portion of long-term debt - 3,587 Current portion of obligations under capital lease 4,662 3,957 --------------------------------- 34,840 34,029 Long-term debt - 11,214 Obligations under capital lease 5,282 5,765 Future income taxes 10,969 5,281 Other long-term liabilities - 278 --------------------------------- 51,091 56,567 --------------------------------- Non-controlling interest 951 - Shareholders' Equity Share capital 157,071 99,091 Contributed surplus 1,358 1,163 Deficit (17,655) (25,046) --------------------------------- 140,774 75,208 --------------------------------- 192,816 131,775 --------------------------------- --------------------------------- /T/ Consolidated Statement Of Income (Loss), Comprehensive Income (Loss) And Deficit For the year ended December 31, 2010 And 2009 (Unaudited) /T/ 2010 2009 $ $ Revenue 153,632 75,096 Expenses Operating 98,498 53,351 Selling, general and administrative 25,967 16,740 Amortization of property, plant and equipment 11,239 7,895 Amortization of intangible assets 3,504 3,604 Amortization of deferred charges - 908 --------------------------------- 139,208 82,498 --------------------------------- Income (loss) before the following 14,424 (7,402) --------------------------------- Gain (loss) on disposal of property, plant and equipment (129) 112 Loss (gain) on foreign exchange 486 80 Interest expense 2,350 1,720 Impairment of goodwill - 11,000 Accretion of convertible debentures 35 - --------------------------------- 2,742 12,912 --------------------------------- Income (loss) before income taxes and non- controlling interests 11,682 (20,314) --------------------------------- Income taxes Current (305) (623) Future 3,681 (2,753) --------------------------------- 3,376 (3,376) --------------------------------- Non-controlling interests 915 - Net income (loss) and comprehensive income (loss) 7,391 (16,938) --------------------------------- Deficit - Beginning of year (25,046) (8,108) --------------------------------- Deficit - End of year (17,655) (25,046) --------------------------------- --------------------------------- Basic income (loss) per share 0.35 (0.84) --------------------------------- Diluted income (loss) per share 0.32 (0.84) --------------------------------- --------------------------------- /T/ Consolidated Statement of Cash Flows For The Year Ended December 31, 2010 And 2009 (Unaudited) /T/ 2010 2009 $ $ Operating activities Net income (loss) for the year 7,391 (16,938) Items not requiring an outlay of cash Impairment of goodwill - 11,000 Amortization of property, plant and equipment 11,239 7,895 Amortization of intangible assets 3,504 3,604 Accretion of convertible debentures 35 - Loss (gain) on disposal of property, plant and equipment (129) 112 Stock option expense 193 250 Future income taxes 3,681 (2,753) Amortization of deferred charges - 778 Non-controlling interests 915 - --------------------------------- 26,829 3,948 Changes in non-cash working capital (6,503) 6,652 --------------------------------- 20,326 10,600 --------------------------------- Investing activities Purchase of property, plant and equipment (40,500) (7,352) Proceeds on disposals of property, plant and equipment 1,096 1,128 --------------------------------- (39,404) (6,224) --------------------------------- Financing activities Change in bank indebtedness (13,249) 1,193 Repayment of long-term debt (14,801) (1,010) Repayment of capital lease obligations (net) (2,203) (4,183) Issuance (repurchase) of share capital 57,782 (376) Conversion of convertible debentures (35) - --------------------------------- 27,494 (4,376) --------------------------------- Change in cash 8,416 - Cash - Beginning of year - - --------------------------------- Cash - End of year 8,416 - --------------------------------- --------------------------------- Supplemental cash flow information Interest paid 2,350 1,720 Income taxes paid - 173 /T/ FOURTH QUARTER AND YEAR END 2010 EARNINGS CONFERENCE CALL Strad Energy Services Ltd. has scheduled a conference call to begin promptly at 9:00 a.m.MT on Wednesday, March 9, 2011. The conference call dial in numbers are 1-866-542-4239 or 1-416-340-8527. An archived recording of the conference call will be available approximately one hour after the completion of the call until March 23, 2011. The replay dial in number is 1-800-408-3053 or 1-905-694-9451. The pass code for replay is 5706437. This recording will be made available until Wednesday, March 23rd. About Strad Energy Services Ltd. Strad is a diversified energy services company that focuses on providing oilfield solutions to the oil and natural gas industry in the Western Canadian Sedimentary Basin (WCSB) and throughout the United States. Strad operates with two core divisions: Drilling Services and Production Services. Drilling Services focuses on providing complete customer solutions in drilling-related oilfield equipment for producers active in unconventional resource plays. Production Services focuses on delivering a range of products and services to support the ongoing maintenance of natural gas and oil production. Strad is headquartered in Calgary, Alberta, Canada. Strad is listed on the Toronto Stock Exchange under the trading symbol "SDY".

Contact Information: Strad Energy Services Ltd. Henry van der Sloot Chief Executive Officer (403) 249-7336 (403) 232-6901 (FAX) hvandersloot@stradenergy.com or Strad Energy Services Ltd. Andy Pernal President (403) 775-9202 (403) 232-6901 (FAX) apernal@stradenergy.com or Strad Energy Services Ltd. Byron Johnson Chief Financial Officer (403) 775-9219 (403) 232-6901 (FAX) bjohnson@stradenergy.com