Xtreme Announces Nine Month Results with New-build XDR 500 Rigs in the Field

CALGARY, ALBERTA--(Marketwire - Nov. 10, 2011) - Xtreme Coil Drilling Corp. ("Xtreme Coil", the "Company")(TSX:XDC) announces filing on SEDAR of the interim unaudited Consolidated Financial Statements and Management's Discussion and Analysis for the three and nine months ended September 30, 2011. Effective January 1, 2011, Xtreme Coil began reporting in accordance with International Financial Reporting Standards ("IFRS"). Prior year comparative amounts were changed to reflect results as if the Company had always prepared its financial results using IFRS. All interim and annual reports may be viewed the Company's website www.xtremecoildrilling.com and at www.sedar.com.

Xtreme Coil has scheduled a conference call on Monday, November 14, 2011 beginning promptly at 8:00am MT (9:00am CT; 10:00am ET) to discuss Xtreme Coil's 2011 nine months financial and operating results. Rod Uchytil, president and chief executive officer, will host the conference call with participation from Matt Porter, chief financial officer, Tom Wood, executive chairman, and other members of management.

To participate in the conference call, please dial in as follows approximately ten minutes before the call begins in your time zone.

+1 888‐340‐9642 (North America Toll‐Free) or +1 416‐340‐9432 (Alternate)

An audio replay of this conference call will be available until Friday, December 02, 2011. To access the replay, dial +1 905‐694‐9451 or +1 800‐408‐3053 and enter pass code 3540067, followed by the pound (#) sign.

2011 Third Quarter

• revenue of $25.3 million
• EBITDA of $5.5 million
• gross margin of $7.4 million
• net loss per common share – basic $(0.01)
• operating days of 1,137
• rig utilization 73 percent
• closed $150 million credit facility
• completed and commissioned one new XDR 500 drilling rig to North Dakota
• commissioned and field-trialed XSR 200 coiled tubing rig in North Dakota
• continued construction modifications on five XSR deep coiled
• continued construction of XDR 500 new-build rigs for 2012 delivery
• launched new website and name change to Xtreme Drilling and Coil Services

In 2011 Fourth Quarter

• completed and commissioned one new XDR 500 drilling rig to the Niobrara
• contracted a further XDR 500 new-build rig for 2012 2Q delivery

Rig #18, in the foreground and Rig #17, in the background, are both XDR 500 series rigs operating in the Bakken resource play in North Dakota.

To view the photo associated with this press release, please visit the following link:

http://media3.marketwire.com/docs/rig18.jpg

Rig #115, an XSR 200 deep coiled tubing rig, upgraded with Xtreme technology and ready to mobilize to Texas for final commissioning with high pressure pumps.

To view the photo associated with this press release, please visit the following link:

http://media3.marketwire.com/docs/rig115.jpg

Excerpt from Management's Discussion and Analysis for the three and nine months ended September 30, 2011 Outlook

Xtreme Drilling and Coil Services continued a robust rig construction and marketing program during the third quarter of 2011. During the quarter and shortly thereafter, two of the new-build XDR 500 rigs were completed and commissioned. One rig was delivered in August to a customer operating in the Bakken prospect of North Dakota and the next rig was delivered in October to a customer operating in the Niobrara shale play in Colorado. An existing XDR 500 rig was redeployed to North Dakota from Texas to operate for a customer also drilling Bakken shale wells. Concurrent to the rig fleet increase, certain existing rigs completed their contracts. Thus, at the close of the third quarter, there were ten rigs working in the US. As of October 31, 2011, a total of 12 rigs were operating in the US and two rigs continued operating in Saudi Arabia for a total of 14 rigs operating currently.

In November, Xtreme entered into an agreement with a syndicate of financial institutions to provide a credit facility of $150 million, replacing the previous $90 million facility. The new Credit Agreement consists of $15 million as a revolving operating loan facility to assist with financing general corporate and working capital requirements and $135 million as an extendable loan facility to refinance existing bank debt and to provide working capital for capital expenditures focused primarily on new-build rig contracts. With the expansion of the credit facility, the Company has the financial strength to execute on previously-announced fleet expansion plans as well more recently-negotiated new-build rig contracts.

The Company's current 2011-2012 capital expenditure program includes the following main components.

• One new-build XDR 500 drilling rig completed and deployed to operations in the Bakken in August 2011.
• One new-build XDR 500 drilling rig completed and deployed to operations in the Niobrara in October 2011.
• Six new-build XDR 500 drilling rigs under construction for deployment throughout 2012.
• Three XDR 200 drilling rigs being prepared for deployment to operations in Canada.
• Conversion of an XDR 200 drilling rig for coiled tubing service work completed in July 2011 and commenced field trials in August 2011.
• Upgrading of five existing coiled tubing service rigs as XSR rigs incorporating Xtreme's proprietary technology.
• Maintenance capital and critical spares required for continuing North American and Middle East operations.

On completion of the current capital expenditure program later in 2012, Xtreme's rig fleet is expected to have grown to 29 rigs from 16 rigs. This expansion will include initiation of a new deep coil well services business line. The Company plans to continue growing at a controlled pace to establish critical mass in each of the new geographic areas where the Company has contracted operations.

Third quarter of 2011 revenue was slightly higher than second quarter revenue. Although the most recent period had 28 fewer operating days, the revenue increase was primarily the result of mobilization. Revenue per operating day was also markedly improved from the previous quarter with $22,300 per day in the third quarter of 2011 compared to $20,800 per day in second quarter. Sequentially, EBITDA was unchanged due to fewer operating days. Looking forward to the fourth quarter of 2011, Xtreme expects operating days to increase from third quarter with the addition of two drilling rigs. A modest revenue offset is anticipated due to the expected completion of another rig contract in December.

The conversion of the XDR 200 to an XSR 200 was completed and this deep re-entry rig, modelled on the design operating in Saudi Arabia, was mobilized to North Dakota. Two field trial jobs were conducted to test the application of Xtreme's proprietary technology in deep horizontal resource play wells. The rig's initial operations, executed on a very tortuous well path, achieved the modeled lock-up depth of approximately 15,540 feet. During the second well, technical difficulties occurred. After field testing, Xtreme concluded the converted rig is more suited to performing deep re-entry drilling operations.

With the knowledge gained from field testing the conversion rig, Xtreme moved forward with five fit-for-purpose XSR coiled tubing service rigs that are highly mobile and can effectively pressure deploy the bottom hole assembly. The modifications of these five rigs continued during the third quarter of 2011. The XSR rigs are the first AC ("alternating current") VFD ("variable frequency drive") coil rigs in the world equipped with 200,000 pound injectors. Deployment of these five rigs is anticipated throughout the first quarter of 2012.

Although Xtreme had undertaken measures to mitigate certain risks of delayed equipment delivery, delays are now expected in obtaining high pressure pumps from the supplier and the pumps will not be available when the first XSR rig is ready to begin operation. Supply chain delays experienced by a third-party manufacturer, relying on components which are delayed by certain other third-parties, have ultimately affected Xtreme's delivery time. As a result of the uncertainty of pressure pump delivery dates, Xtreme now expects to fully commission and deploy at least two, and possibly three, XSR rigs in the first quarter of 2012. Xtreme is dedicating additional resources to assist the supplier in meeting the revised target dates and is seeking short-term alternatives to address pumping requirements.

Xtreme's recruiting efforts have been extensive throughout the third quarter. The Company identified candidates for approximately 70 to 80 percent of the required positions for the deep coiled tubing well services business line and continues to pursue additional candidates. Crew retention also required extra focus for our contract drilling business due to the high activity levels in the basins where the Company operates. This trend of tight labor supply is likely to continue to challenge Xtreme into future quarters as long as activity levels remain robust.

Field testing of the prototype mining rig continued during the third quarter of 2011 and modifications were made to certain components, followed by some waiting time for access to appropriate downhole tools required to progress testing. The rig itself has achieved many successful milestones. To date, the primary limiting factor for a commercialization decision centers on downhole tool requirements which are essential to deliver the rig's desired advances in drilling performance. The joint venture partners have not yet made a commerciality determination and field testing of the rig will continue. Xtreme remains positive about results achieved by this innovative prototype rig to date and the joint venture partners are working to reach a commerciality decision by year-end.

Xtreme's operations in Saudi Arabia continue to achieve consistently superior operational results and low rig-related non-productive time. There were fewer impacts on revenue from third-party contractors within the bundled services contract during the third quarter. New records were achieved for the longest footage drilled in a calendar day and for the longest distance drilled with a single bottom hole assembly.

As discussed in prior interim reports, the business development cycle in the Middle East region can be longer than in North America. However, Xtreme continues to believe there are additional opportunities for future growth in Saudi Arabia and other Middle East markets.

Throughout 2011, Xtreme has had limited success in contracting the XDR 200 rigs in the US. One XDR 200 rig has worked in Wyoming for most of 2011 and another was contracted in Mississippi for a four-month project. While the market for top drive, single AC electric rigs is not robust in the US, there are opportunities to redeploy the XDR 200 rigs into the Canadian drilling market. The efficiencies delivered by this rig design are well understood and accepted as applicable to Canada's shallower and unconventional resource plays which are demonstrating demand for additional newer technology rigs. In November, the Company committed to two projects for three XDR 200 rigs and is now preparing to deploy the rigs to Canada with operations expected to begin between December 2011 and January 2012. Xtreme is actively pursuing additional contracts to redeploy the remaining XDR 200 rigs to operate in several regions of Canada.

While there are some activity level uncertainties in the North American drilling market as a whole, a significant portion of Xtreme's fleet is committed under term contracts extending more than two years from now. At this time, thirteen of eighteen available rigs operate under term contracts and six of eleven rigs under construction are also under term contracts. The five XSR rigs under construction and the four XDR 200 rigs are the main rigs in the fleet not currently under term contracts. However, the XSR rigs are, primarily, expected to operate under call-out terms rather than take or pay contracts. By 2012 year-end, Xtreme anticipates having 19 of 29 rigs under term contracts and will continue to pursue a number of opportunities to contract the remaining available rigs in the fleet.

Xtreme's announced growth plan remains realistic and achievable despite certain delays in the delivery of the new XSR rigs. Management believes 2012 has the potential to be the highest growth period and the most profitable year in the Company's history. Xtreme's fleet is expected to expand by approximately 81 percent to reach 21 XDR drilling rigs and eight XSR deep coiled tubing rigs over an 18-month period.

Additional Information

Information relating to Xtreme Coil is available on SEDAR at www.sedar.com. To obtain copies of published corporate information, contact the Corporate Secretary at Xtreme Coil Drilling Corp., 1402, 500 Fourth Avenue SW, Calgary, AB T2P 2V6 (telephone +1-403 262-9500), visit Xtreme Coil's website www.xtremecoildrilling.com or e-mail ir@xtremecoil.com.

Xtreme Coil Drilling Corp.
Consolidated Statements of Financial Position
(unaudited)
(in thousands of Canadian dollars)		September 30, 2011			December 31, 2010
Assets
Current assets
	Cash and cash equivalents	$	11,665		$	2,994
	Accounts receivable, net of allowance for doubtful accounts of $0 and $322, respectively		40,225			37,083
	Other receivables		1,725			2,200
	Prepaid expenses and other		2,631			2,551
	Income taxes recoverable		1,248			1,967
	Inventory		6,107			5,402
Total Current Assets			63,601			52,197
Deferred tax asset			6,306			4,265
Property and equipment, net (Note 5)			301,229			233,193
Intangible assets (Note 6)			4,599			4,793
Total Assets		$	375,735		$	294,448
Liabilities and Shareholders' Equity
Current liabilities
	Bank indebtedness	$	–		$	8,317
	Accounts payable and accrued liabilities		10,793			10,097
	Current portion of long-term debt (Note 7)		500			12,224
Total current liabilities			11,293			30,638
Long-term debt (Note 7)			47,427			18,952
Total Liabilities			58,720			49,590
Shareholders' equity
	Share capital (Note 8)		310,255			253,765
	Contributed surplus		10,017			8,585
	Accumulated deficit		(3,233	)		(4,496	)
	Accumulated other comprehensive loss		(24	)		(12,996	)
Total Shareholders' Equity			317,015			244,858
Total Liabilities and Shareholders' Equity		$	375,735		$	294,448

Xtreme Coil Drilling Corp.
Consolidated Statements of Income
(unaudited)
		Three months ended						Nine months ended
(in thousands of Canadian dollars, except share and per share data)		Sep 30, 2011			Sep 30, 2010			Sep 30, 2011			Sep 30, 2010
Revenue	$	25,299		$	21,310		$	72,737		$	62,021
Expenses
Operating expenses		17,927			10,900			50,430			34,729
General and administrative expenses		1,857			2,655			7,027			9,317
Depreciation of property and equipment		2,910			2,054			8,337			6,996
Amortization of intangibles		75			74			227			220
Stock-based compensation		466			373			1,548			927
Impairment of goodwill		–			1,630			–			1,630
Impairment of equipment		–			2,528			–			2,528
Foreign exchange loss (gain)		3,231			(334	)		2,943			(604	)
(Gain) loss on sale of equipment		(4	)		(32	)		(53	)		5
Other income		–			(25	)		–			(25	)
Interest expense		518			373			1,527			1,311
Income (loss) before tax for the period		(1,681	)		1,114			751			4,987
Tax expense (recovery)
Current		416			278			585			1,840
Deferred		(1,437	)		819			(1,097	)		(328	)
Total tax expense (recovery)		(1,021	)		1,097			(512	)		1,512
Net income (loss) for the period	$	(660	)	$	17		$	1,263		$	3,475
Net income (loss) per common share
– basic	$	(0.01	)	$	–		$	0.02		$	0.07
– diluted	$	(0.01	)	$	–		$	0.02		$	0.06
Weighted average number of common shares (Note 8)
– basic		65,577,631			53,147,785			58,738,474			53,125,800
– diluted		66,030,042			53,449,488			59,396,046			53,679,926

Xtreme Coil Drilling Corp.
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
		Three months ended						Nine months ended
(in thousands of Canadian dollars)		Sep 30, 2011			Sep 30, 2010			Sep 30, 2011		Sep 30, 2010
Net income (loss) for the period	$	(660	)	$	17		$	1,263	$	3,475
Other comprehensive income (loss)
Unrealized (loss) gain on translating financial statements of foreign operations		19,793			(6,530	)		12,972		(4,347	)
Comprehensive income (loss) for the period	$	19,133		$	(6,513	)	$	14,235	$	(872	)

Xtreme Coil Drilling Corp
Consolidated Statements of Changes in Equity (unaudited)
(in thousands of Canadian dollars)	Share capital			Warrants		Contributed Surplus		Accumulated deficit		Accumulated other comprehensive loss		Total equity
Balance at January 1, 2010	$	252,714		1,630		5,509		(8,924	)	–		$	250,929
Net income for the period		–		–		–		3,474		–			3,474
Currency translation differences		–		–		–		–		(4,347	)		(4,347	)
Total comprehensive income period		–		–		–		(5,450	)	(4,347	)	$	(9,797	)
Transactions with owners
Cancellation of warrants				(1,630	)	1,630				–			–
Purchase of own shares		(258	)			112				–			(146	)
Employee share option scheme:
Value of employees services		233		–		1,087		–		–			1,320
Proceeds from shares issued		1,021		–		(233	)	–		–			788
Total transactions with owners		253,710		–		8,105		–		–			261,815
Balance at September 30, 2010	$	253,710		–		8,105		(5,450	)	(4,347	)	$	252,018
Balance at January 1, 2011	$	253,765		–		8,585		(4,496	)	(12,996	)	$	244,858
Net income for the period		–		–		–		1,263		–			1,263
Currency translation differences		–		–		–		–		12,972			12,972
Total comprehensive income		–		–		–		(3,233	)	(24	)	$	(3,257	)
Transactions with owners
Employee share option scheme:
Value of employee services		133		–		1,548		–		–			1,681
Proceeds from shares Issued, net of share issue costs		56,357		–		(116	)	–		–			56,241
Total transactions with owners		310,225		–		10,017		–		–			320,272
Balance at September 30, 2011	$	310,225		–		10,017		(3,233	)	(24	)	$	317,015

Reader Advisory

This news release, or documents incorporated herein, contains forward-looking statements ("FLS"). More particularly, this news release contains statements that may relate to contracting, marketing, financing, construction, modifications, deployment, operation, and utilization of drilling and service rigs in the Company's current and future fleet. Although Xtreme believes expectations reflected in these FLS are reasonable, readers should not place undue reliance on them because Xtreme can give no assurance they will prove to be correct. Many factors could cause FLS not to be correct, including risks and uncertainties inherent in the Company's business.

FLS are based on certain factors and assumptions including, but not limited to: the assessment of current and projected future drilling, well servicing and related operations; ongoing and future strategic business alliances, negotiations and opportunities to enter new, extend or complete existing contracts; the availability and cost of financing; currency exchange rates; timing and magnitude of capital expenditures; expenses and other variables affecting rig operation, modification and construction; the ability and commitment of vendors to provide rig component equipment, services and supplies, including labor, in a cost-effective and timely manner; the issuance of applied-for patents; changes in tax structures and rates; and, government regulations. Although Xtreme considers the assumptions used to prepare this news release reasonable, based on information available to management as of November 9, 2011, ultimately the assumptions may prove to be incorrect.

FLS statements are also subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from management's current expectations. These factors include, but are not limited to: the cyclical nature of drilling and well servicing market demand, currency exchange rates and commodity prices; access to credit and to equity markets; the availability and retention of qualified personnel; vendor-provided rig components and services; and, competition for customers.

Management's assumptions considered the following: compliance with the terms of the Company's current credit facility; ongoing access to key services, supplies and components required to continue operating and maintaining equipment, including fuel; continued successful performance of drilling, well servicing and related equipment; expectations regarding gross margin; recruitment and retention of qualified personnel; continuation or extension of existing long-term, multi-well contracts or other contracts; revenue expectations related to shorter-term drilling and well servicing opportunities; willingness and ability of customers to remit amounts owing to Xtreme in accordance with normal industry practices; and, management of accounts receivable in direct relation to revenue generation.

In preparing this news release, management considered the following risk factors: fluctuations in crude oil and natural gas prices, as well as supply and demand; fluctuation in currency exchange and interest rates; financial stability of Xtreme's customers; current and future applications for Xtreme's proprietary technology; related services provided by, and competition from, other drilling and well servicing contractors; regulatory and economic conditions in regions where Xtreme operates; environmental constraints; changes to government legislation; international trade barriers or restrictions; and, where appropriate, global economic, political and military events.

FLS contained herein about prospective results of operations, financial position or cash provided by operating activities is based on assumptions about future events, including economic conditions and proposed courses of action, and on management's assessment of relevant information currently available. Readers are cautioned financial outlook information is not appropriate for purposes other than for which it is disclosed here. Readers should not place undue importance on FLS and should not rely on this information as of any other date. Except as required pursuant to applicable securities laws, Xtreme disclaims any intention, and assumes no obligation, to update publicly or revise FLS to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such FLS or otherwise.

About Xtreme Coil

Xtreme Coil Drilling Corp. ("XDC" on the Toronto Stock Exchange) and its subsidiaries operate under the brand name Xtreme Drilling and Coil Services. Xtreme owns and operates a fleet of proprietary, dual-purpose deep capacity drilling rigs and coiled tubing well servicing units featuring the Company's patented COTD® designs. Xtreme offers oil and natural gas producers outstanding performance and efficiency through leading-edge technology. Currently, we are drilling under contracts in Colorado, North Dakota, Texas, Wyoming and Utah. Two deep coil service rigs are conducting re-entry horizontal drilling operations under a joint venture in Saudi Arabia and one is based in North Dakota to provide ultra-deep horizontal well post fracture cleanouts. For more information about the company, please visit www.xtremecoil.com.