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Xtreme Drilling and Coil Services Announces Third Quarter 2013 Operating and Financial Results

CALGARY, ALBERTA -- (Marketwired) -- 11/06/13 -- Xtreme Drilling and Coil Services ("Xtreme" or the "Company") (TSX:XDC) announces summary results for the three and nine months ended September 30, 2013. It is anticipated that filing will take place on SEDAR of the Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis on Wednesday, November 6, 2013.

Highlights - Q3 2013


--  Adjusted EBITDA was $17.8 million for the third quarter. This was an
    increase of $1 million, or 6%, over the previous quarter. The growth in
    Adjusted EBITDA in the quarter was driven by increased activity in
    Canada as well as higher operating margins in both the US and Saudi
    Arabian XSR business. These gains were offset by a decrease of $1.6
    million in the US XDR operating margin for the third quarter due to
    higher repair and maintenance costs and weather-related matters in
    Colorado. 

--  Revenue was $59.7 million in the quarter which is an increase of 12%, or
    $6.4 million, over the second quarter. The increase in revenue for the
    quarter was a function of 151 additional operating days. In addition,
    revenue per operating day increased by $1,074 to $28,949. The increase
    in revenue per day was driven primarily by the XSR business. The US XSR
    division increased revenue per day by $2,700, or 5.6%, and the Saudi
    Arabian operation increased revenue by $5,000 per day in the third
    quarter.

--  The Company had 2,062 operating days in the third quarter of 2013. This
    resulted in a utilization rate of 83% for the fleet of 21 XDR drilling
    rigs and 7 XSR coiled tubing units. 

--  Net income of $3.3 million, less amount attributable to non-controlling
    interest of $0.08 million, for net income attributable to the owners of
    the parent of $3.2 million for the third quarter of 2013, or $.04 per
    fully diluted share. 

--  The Company continued to allocate free cash flow to pay down debt in the
    quarter. Total debt at quarter end was $121.3 million which is down from
    $137 million at the end of the second quarter. Net debt (total debt less
    cash) at quarter end was $110.3 million and represents the lowest level
    since the fourth quarter of 2011. Xtreme exited the quarter with working
    capital of $9.5 million and a funded debt to Adjusted EBITDA ratio of
    1.74, which is well under the credit facility covenant level of 3.00.
    Capital expenditures totaled $6.6 million for the third quarter.

--  In Saudi Arabia the Company received a contract extension of six months
    through March of 2014 on one of the two XSR units in operation. The
    second unit is working under a three year contract that was renewed in
    July of 2013. The Company continues to negotiate the purchase of the 20%
    interest in the Saudi Arabian joint venture from the local partner. It
    is anticipated that more clarity around consideration and structure will
    be available before the end of the fourth quarter.

--  The Company has agreed in principal to a new credit facility led by
    Wells Fargo Energy. It will be structured as a three year revolving
    facility with $150 million in capacity and a $25 million accordion
    feature. It is expected to close by December of 2013. 

--  During the third quarter, the Company modified the classification of the
    Non-Controlled Interest ("NCI") in the Saudi Arabian joint venture. It
    was determined after review of the accounting standard that the Company
    should re-classify the NCI from equity to liability. This is based on
    the requirement to account for the fair value of the put option held by
    the Saudi Arabia joint venture partner as per the shareholder agreement
    dated March 12, 2010. As a result, the Company reflected the liability
    effective January 1, 2012, restating the previous periods in the third
    quarter financials. At September 30, 2013, the liability of the option
    is approximately $11.9 million.

Selected Quarterly Financial Information (unaudited)


Three months ended                       Sep 30,  Jun 30,  Mar 31,  Dec 31, 
                                            2013     2013     2013     2012 
----------------------------------------------------------------------------
Revenue                                   59,692   53,268   54,182   51,852 
Adjusted EBITDA (1)                       17,783   16,847   19,234   15,029 
Adjusted EBITDA as a percentage of                                          
 Revenue                                      30       32       35       29 
Adjusted EBITDA per share (1) - basic                                       
 ($)                                        0.22     0.21     0.24     0.19 
Net income                                 3,283      240    4,487    3,827 
Net income per share - basic ($)            0.04     0.00     0.06     0.05 
Capital assets                           416,887  431,294  417,431  415,354 
Total assets                             504,728  520,326  508,823  506,551 
Net debt(2)                              110,326  127,977  130,014  141,841 
----------------------------------------------------------------------------
Operating days (1)                         2,062    1,911    1,949    1,891 
Utilization (percentage) - XDR                89       85       89       85 
Utilization (percentage)- XSR                 61       53       49       47 
Utilization (percentage) - Total              83       78       80       77 
Weighted average rigs in service            28.0     28.0     28.0     26.8 
Total rigs, end of quarter                    28       28       28       28 
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
                                         Sep 30,  Jun 30,  Mar 31,  Dec 31, 
                                            2012     2012     2012     2011 
----------------------------------------------------------------------------
Revenue                                   48,948   40,180   38,446   32,552 
Adjusted EBITDA (1)                        4,459    7,695    7,909    4,626 
Adjusted EBITDA as a percentage of                                          
 Revenue                                       9       19       21       14 
Adjusted EBITDA per share (1) - basic                                       
 ($)                                        0.07     0.12     0.12     0.10 
Net (loss) income                         (2,935)  (2,059)   1,689   (1,025)
Net (loss) income per share - basic ($)    (0.04)   (0.03)    0.03    (0.02)
Capital assets                           425,364  425,397  379,710  348,148 
Total assets                             511,318  512,254  464,453  424,921 
Net debt(2)                              119,759  144,039  109,546   75,563 
----------------------------------------------------------------------------
Operating days (1)                         1,742    1,494    1,423    1,246 
Utilization (percentage) - XDR                86       74       84       73 
Utilization (percentage)- XSR                 36       57       56       97 
Utilization (percentage) - Total              74       70       79       75 
Weighted average rigs in service            26.0     23.4     19.8     18.0 
Total rigs, end of quarter                    28       27       18       18 
----------------------------------------------------------------------------
(1)  Adjusted EBITDA. See Reconciliation of adjusted EBITDA below           
(2)  Total debt less cash                                                   

Excerpt from Management's Discussion and Analysis

For the three and nine months ended September 30, 2013

Outlook

Xtreme has made significant progress over the course of 2013. The Company significantly improved financial performance as Adjusted EBITDA margins have increased to 32%, from 22% in 2012, and net debt levels have decreased by $31.6 million, to $110.3 million, from December 31, 2012. Additionally, the Company has established a consistent operating history as the longest reach coil provider in the Eagle Ford, with a fourth new build unit preparing to begin operations. As the Company moves into 2014 management is committed to continue the momentum of 2013 and focus on increasing shareholder value.

In the third quarter, the drilling services segment was negatively impacted in the United States by substantial rain and flooding in Colorado. The Company had nine XDR rigs operating in Colorado for September. During the quarter, repair and maintenance expenses were up by $950 per operating day, or $1.4 million, due to the associated equipment failures, additional maintenance on a previously stacked rig and modifications to a XDR 300 rig that switched customers. These expenses along with increased inventory consumption decreased operating margin in the US by $1.6 million as compared to the second quarter. The Company believes that the majority of the weather related costs occurred in the third quarter and operating expenses should trend lower toward historical averages in the fourth quarter.

All 18 US XDR rigs are currently contracted and the Company estimates that utilization in the US drilling division will be in the 92% to 95% range for the fourth quarter, slightly better than the 91% in the third quarter. Including the three Canadian XDR rigs the drilling segment achieved an 89% utilization rate in the third quarter. Based on current activity levels utilization on the 21 rig XDR fleet should be in the 90% to 93% range for the fourth quarter.

At this time the Company has three XDR 300 and two XDR 500 rigs that come up for renewal in the US within 75 days. Management is currently exploring several opportunities both domestically and internationally for the two XDR 300 rigs that roll off contract. One of the most appealing is the emerging Las Animas play in Eastern Colorado. Currently, the Company has one rig deployed in this play with the potential for additional rigs in the future. The XDR 300 rigs are unique options in the depth category of this play. Typically rigs in the 8,000 to 12,000 foot total measured depth category are inefficient legacy rigs. It is rare for an operator to have an option for a rig with the combination of AC technology, top drive, high horse-power mud pumps and a skidding system all in a rig that moves in minimal loads. The prospects remain good for the XDR 500 series rigs as they come off of contract in the Bakken and Niobrara. For 2014, Xtreme expects to have approximately 3,300 operating days under term contracts.

The coil services segment had another strong quarter. Operating margins were up by almost $1.3 million from the second quarter. This is based on improvement of performance and pricing. The coil services segment had record revenue of $16.1 million or 27% of total Company revenue for the third quarter.

In the US XSR division operating margin increased by 44% from the previous quarter on 45 additional operating days. Fourth quarter activity levels have been strong which is encouraging as this period is typically less active. Customer acceptance has dramatically increased over the course of 2013. In 2014 there is the potential for term contracts in the US business which should improve revenue transparency in a business that historically has operated from job to job.

Conference Call Details

The Company will conduct a conference call on Wednesday, November 6 at 9:00 am MST, 10:00 am CT. Tom Wood, Chief Executive Officer, will host the conference call with participation from Matt Porter, Chief Financial Officer, and will answer questions from analysts and investors.

To participate in the conference call, please dial in as follows approximately ten minutes before the start time in your time zone, or click on the webcast link below.


  +1 866-226-1798 (North America Toll-Free) or +1 416-340-2220 (Alternate)  
                   Webcast link: www.gowebcasting.com/4945                  

An audio replay of the call will be available until Tuesday, November 13, 2013. To access the replay, call +1 800-408-3053 or +1 905-694-9451 and enter pass code 4828220.

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, utilization of drilling rigs in the Company's current and future fleet, and any potential outcome relating to claims and litigation. Further, the FLS herein may relate to trade credit insurance carried by the Company to mitigate receivables collection risk. 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. There are many factors that could cause FLS not to be correct, including risks and uncertainties inherent in the Company's business.

These statements are based on certain factors and assumptions including, but not limited to: the assessment of current and projected future operations; ongoing and future strategic business alliances, negotiations and opportunities to enter new, extend or complete existing contracts; the availability and cost of financing; foreign 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 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 5, 2013, ultimately the assumptions may prove to be incorrect.

Forward-looking 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 market demand, foreign currency exchange rates, and commodity prices; access to credit and to equity markets; the availability of qualified personnel; vendor-provided rig components; and, competition for customers.

Management's assumptions considered the following: compliance with the terms of the Company's current and proposed new credit facility; ongoing access to key supplies and components required to continue operating and maintaining equipment, including fuel; continued successful performance of drilling and related equipment; expectations regarding gross margin; recruitment and retention of qualified personnel; continuation or extension of existing long-term or multi-well contracts; revenue expectations related to shorter-term drilling 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.

Financial outlook information contained in this news release 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 such financial outlook information contained in this news release 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 Drilling and Coil Services

Xtreme Drilling and Coil Services Corp. ("XDC" on the Toronto Stock Exchange) designs, builds, and operates a fleet of high specification drilling rigs and coiled tubing well service units featuring leading-edge proprietary technology including AC high capacity coil injectors, deep re-entry drilling capability, modular transportation systems and continuous integration of in-house advances in methodologies.

Currently Xtreme operates two service lines: Drilling Services and Coil Services under contracts with oil and natural gas exploration and production companies and integrated oilfield service providers in Canada, the United States and Saudi Arabia. For more information about the Company, please visit www.xtremecoil.com.


Xtreme Drilling and Coil Services Corp.                                     
Condensed Interim Consolidated Statements of Financial Position             
(in thousands of Canadian dollars)                                          
(unaudited)                                                                 
                                                                            
                                                Sep 30,   Dec 31,    Jan 1, 
                                                   2013      2012      2012 
                                              ------------------------------
                                              ------------------------------
Assets                                                                      
Current assets                                                              
  Cash and cash equivalents                      11,017     5,921     6,873 
  Accounts receivable                            46,940    44,878    46,653 
  Other receivables                               4,361     2,975     1,636 
  Prepaid expenses and other                      2,646     2,047     2,114 
  Assets held for sale                                -     9,308         - 
  Income tax recoverable                             60       368       928 
  Inventory                                       7,083     6,474     6,470 
                                              ------------------------------
                                                 72,107    71,971    64,674 
Non-current assets                                                          
Deferred tax asset                               11,742    15,006     7,576 
Property and equipment                          416,887   415,354   348,148 
Intangible assets                                 3,992     4,220     4,523 
                                              ------------------------------
Total Assets                                    504,728   506,551   424,921 
                                              ------------------------------
                                              ------------------------------
                                                                            
Liabilities and Equity                                                      
Current liabilities                                                         
  Bank indebtedness                                   -     7,834         - 
  Accounts payable and accrued liabilities       30,180    27,904    26,902 
  Financial liability on non-controlling                                    
   interest                                      11,984         -         - 
  Current portion of long-term debt              20,405    14,201       500 
                                              ------------------------------
                                                 62,569    49,939    27,402 
                                                                            
Long-term liabilities                                                       
Financial liability on non-controlling                                      
 interest                                             -    12,878    13,707 
Long-term debt                                  100,938   125,727    81,936 
                                              ------------------------------
Total Liabilities                               163,507   188,546   123,045 
                                              ------------------------------
                                                                            
Shareholder's equity                                                        
Share capital (Note 9)                          328,115   327,197   310,296 
Share option reserve                             12,258    11,572    10,338 
Accumulated deficit                              (5,204)  (12,370)  (12,212)
Foreign currency translation reserve              1,993   (11,314)   (8,209)
                                              ------------------------------
                                                337,162   315,085   300,213 
                                                                            
Non-controlling interest                          4,059     2,922     1,663 
                                                                            
                                              ------------------------------
Total Liabilities and Equity                    504,728   506,551   424,921 
                                              ------------------------------
                                              ------------------------------
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Condensed Interim Consolidated Statements of Income (Loss)                  
For the three and nine months ended September 30, 2013 and 2012             
(in thousands of Canadian dollars, except share and per share data)         
(unaudited)                                                                 
                                                                            
                                                                            
                                   Three months ended     Nine months ended 
                                --------------------------------------------
                                --------------------------------------------
                                   Sep 30,    Sep 30,    Sep 30,    Sep 30, 
                                      2013       2012       2013       2012 
                                --------------------------------------------
Revenue                             59,692     48,948    167,142    127,574 
                                                                            
Expenses                                                                    
Operating expenses                  39,285     36,442    105,242     93,369 
General and administrative                                                  
 expenses                            2,552      1,813      7,964      7,909 
Impairment of accounts                                                      
 receivable                             72      6,235         72      6,235 
Change in fair value of                                                     
 financial instrument                 (656)      (885)      (894)    (1,851)
Depreciation of property and                                                
 equipment                          12,740      6,616     30,381     17,215 
Amortization of intangibles             76         76        228        228 
Stock-based compensation               536        141        966      1,172 
Foreign exchange (gain) loss        (1,676)    (3,103)     3,469     (2,727)
(Gain) loss on sale of equipment       (26)       135          5        143 
Loss on damage of property and                                              
 equipment                               -        538          -        538 
Other expenses                          23         42         80        128 
Interest expense                     1,495      2,512      5,278      5,511 
                                --------------------------------------------
                                --------------------------------------------
Income (loss) before tax for the                                            
 period                              5,271     (1,614)    14,351       (296)
                                                                            
Tax expense                                                                 
Current                              1,451        991      3,063      2,774 
Deferred                               539        330      3,280        237 
                                --------------------------------------------
                                --------------------------------------------
Total tax expense                    1,990      1,321      6,343      3,011 
                                                                            
Net income (loss) for the period     3,281     (2,935)     8,008     (3,307)
                                --------------------------------------------
                                --------------------------------------------
                                                                            
Net income (loss) attributable                                              
 to                                                                         
  Owners of the parent               3,199     (3,260)     7,166     (4,320)
  Non-controlling interest              82        325        842      1,013 
                                --------------------------------------------
                                     3,281     (2,935)     8,008     (3,307)
                                --------------------------------------------
                                --------------------------------------------
                                                                            
                                                                            
Net income (loss) per common                                                
 share attributable to equity                                               
 owners of the parent                                                       
- basic                               0.04      (0.05)      0.09      (0.07)
- diluted                             0.04      (0.05)      0.09      (0.07)
                                                                            
Weighted average number of                                                  
 common shares                                                              
- basic                         80,790,315 66,114,690 80,790,315 65,867,322 
- diluted                       81,578,440 66,114,690 81,240,432 65,986,823 
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Condensed Interim Consolidated Statements of Comprehensive (Loss) Income    
For the three and nine months ended September 30, 2013 and 2012             
(in thousands of Canadian dollars)                                          
(unaudited)                                                                 
                                                                            
                                     Three months ended   Nine months ended 
                                    ----------------------------------------
                                    ----------------------------------------
                                      Sep 30,   Sep 30,   Sep 30,   Sep 30, 
                                         2013      2012      2013      2012 
                                    ----------------------------------------
Net income (loss) for the period        3,281    (2,935)    8,008    (3,307)
Other comprehensive (loss) income                                           
Items that may be reclassified                                              
 subsequently to net income                                                 
Unrealized (loss) gain on                                                   
 translating financial statements of                                        
 foreign operations                    (8,480)   (7,045)   13,602    (5,842)
                                    ----------------------------------------
Comprehensive (loss) income for the                                         
 period                                (5,199)   (9,980)   21,610    (9,149)
                                    ----------------------------------------
                                    ----------------------------------------
                                                                            
Comprehensive (loss) income for the                                         
 period attributable to:                                                    
  Owners of the parent                 (5,046)  (10,020)   20,474    (9,893)
  Non-controlling interest               (153)       40     1,136       744 
                                    ----------------------------------------
Comprehensive (loss) income for the                                         
 period                                (5,199)   (9,980)   21,610    (9,149)
                                    ----------------------------------------
                                    ----------------------------------------
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Condensed Interim Consolidated Statements of Changes in Equity              
For the nine months ended September 30, 2013 and 2012                       
(in thousands of Canadian dollars)                                          
(unaudited)                                                                 


                                                                    Foreign 
                                        Share                      currency 
                         Share         option    Accumulated    translation 
                       capital        reserve        deficit        reserve 
                ------------------------------------------------------------
                ------------------------------------------------------------
Balance at                                                                  
 January 1, 2012       310,296         10,338         (4,325)        (8,209)
                ------------------------------------------------------------
Impact of                                                                   
 restatement of                                                             
 financial                                                                  
 liability                   -              -         (7,887)               
                       310,296         10,338        (12,212)        (8,209)
                ------------------------------------------------------------
Net (loss)                                                                  
 income for the                                                             
 period                      -              -         (4,320)             - 
Other                                                                       
 comprehensive                                                              
 income                                                                     
Currency                                                                    
 translation                                                                
 differences                 -              -              -         (5,574)
                ------------------------------------------------------------
Total                                                                       
 comprehensive                                                              
 (loss) income               -              -         (4,320)        (5,574)
                ------------------------------------------------------------
                                                                            
Employee                                                                    
 shareoption                                                                
 scheme:                                                                    
Value of                                                                    
 employees                                                                  
 services                  105          1,267              -              - 
Proceeds from                                                               
 shares issued          16,833           (105)             -              - 
                ------------------------------------------------------------
Total                                                                       
 transactions                                                               
 with owners            16,938          1,162              -              - 
                ------------------------------------------------------------
Balance at                                                                  
 September 30,                                                              
 2012                  327,234         11,500        (16,532)       (13,783)
                ------------------------------------------------------------
                ------------------------------------------------------------
                                                                            
                ------------------------------------------------------------
                ------------------------------------------------------------
Balance at                                                                  
 January 1, 2013       327,197         11,572         (5,312)       (11,314)
Impact of                                                                   
 restatement of                                                             
 financial                                                                  
 liability                   -              -         (7,058)               
                       327,197         11,572        (12,370)       (11,314)
                ------------------------------------------------------------
Net income for                                                              
 the period                  -              -          7,166              - 
Other                                                                       
 comprehensive                                                              
 income                                                                     
Currency                                                                    
 translation                                                                
 differences                 -              -              -         13,307 
                ------------------------------------------------------------
Total                                                                       
 comprehensive                                                              
 income                      -              -          7,166         13,307 
                ------------------------------------------------------------
                                                                            
Employee share                                                              
 option scheme:                                                             
Value of                                                                    
 employee                                                                   
 services                  281            967              -              - 
Proceeds from                                                               
 shares                                                                     
Issued, net of                                                              
 issue costs               637           (281)             -              - 
                ------------------------------------------------------------
Total                                                                       
 transactions                                                               
 with owners               918            686              -              - 
                ------------------------------------------------------------
Balance at                                                                  
 September 30,                                                              
 2013                  328,115         12,258         (5,204)         1,993 
                ------------------------------------------------------------
                ------------------------------------------------------------

                        Equity                               
                  attributable           Non-          Total 
                 to the owners    controlling  shareholders' 
                 of the parent       interest         equity 
                ---------------------------------------------
                ---------------------------------------------
Balance at                                                   
 January 1, 2012       308,100          7,483        315,583 
                ---------------------------------------------
Impact of                                                    
 restatement of                                              
 financial                                                   
 liability              (7,887)        (5,820)       (13,707)
                       300,213          1,663        301,876 
                ---------------------------------------------
Net (loss)                                                   
 income for the                                              
 period                 (4,320)         1,013         (3,307)
Other                                                        
 comprehensive                                               
 income                                                      
Currency                                                     
 translation                                                 
 differences            (5,574)          (268)        (5,842)
                ---------------------------------------------
Total                                                        
 comprehensive                                               
 (loss) income          (9,894)           745         (9,149)
                ---------------------------------------------
                                                             
Employee                                                     
 shareoption                                                 
 scheme:                                                     
Value of                                                     
 employees                                                   
 services                1,372              -          1,372 
Proceeds from                                                
 shares issued          16,728              -         16,728 
                ---------------------------------------------
Total                                                        
 transactions                                                
 with owners            18,100              -         18,100 
                ---------------------------------------------
Balance at                                                   
 September 30,                                               
 2012                  308,149          2,408        310,827 
                ---------------------------------------------
                ---------------------------------------------
                                                             
                ---------------------------------------------
                ---------------------------------------------
Balance at                                                   
 January 1, 2013       322,143          8,742        330,885 
Impact of                                                    
 restatement of                                              
 financial                                                   
 liability              (7,058)        (5,820)       (12,878)
                       315,085          2,922        318,007 
                ---------------------------------------------
Net income for                                               
 the period              7,166            842          8,008 
Other                                                        
 comprehensive                                               
 income                                                      
Currency                                                     
 translation                                                 
 differences            13,307            295         13,602 
                ---------------------------------------------
Total                                                        
 comprehensive                                               
 income                 20,473          1,137         21,610 
                ---------------------------------------------
                                                             
Employee share                                               
 option scheme:                                              
Value of                                                     
 employee                                                    
 services                1,248              -          1,248 
Proceeds from                                                
 shares                                                      
Issued, net of                                               
 issue costs               356              -            356 
                ---------------------------------------------
Total                                                        
 transactions                                                
 with owners             1,604              -          1,604 
                ---------------------------------------------
Balance at                                                   
 September 30,                                               
 2013                  337,162          4,059        341,221 
                ---------------------------------------------
                ---------------------------------------------
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Condensed Interim Consolidated Statements of Cash Flows                     
For the nine months ended September 30, 2013 and 2012                       
(in thousands of Canadian dollars)                                          
(unaudited)                                                                 
                                                                            
                                                             2013      2012 
                                                        --------------------
                                                        --------------------
Cash flow provided by:                                                      
Operating activities                                                        
Net income (loss) for the period                            8,008    (3,307)
Items not affecting cash:                                                   
  Depreciation and amortization                            30,609    17,442 
  Stock-based compensation                                    966     1,172 
  Loss on sale of equipment                                     5       143 
  Change in fair value of financial instrument               (896)   (1,851)
  Impairment of accounts receivable                            72     6,235 
  Interest expense                                          5,120     4,632 
  Amortization of debt issuance costs                         143       879 
  Loss on damage of property and equipment                      -       538 
  Unrealized foreign exchange loss (gain)                   3,469    (2,727)
  Current tax expense                                       3,063     2,774 
  Deferred tax expense                                      3,280       237 
  Interest paid                                            (5,874)   (4,258)
  Changes in items of working capital                       7,988    17,389 
                                                        --------------------
Net cash generated from operating activities               55,953    39,298 
                                                        --------------------
Financing activities                                                        
  Proceeds from shares issued                                   -    16,367 
  Proceeds from exercise of stock options                     650       255 
  Proceeds from long-term debt                                  -    65,133 
  Repayment of long-term debt                             (23,398)   (5,213)
  Repayment of operating facility                          (7,834)        - 
  Debt issuance cost                                          (22)   (1,004)
                                                        --------------------
Net cash (used in) generated from financing activities    (30,604)   75,538 
                                                        --------------------
Investing activities                                                        
  Proceeds from sale of equipment                             569       673 
  Capital expenditures                                    (19,169) (103,080)
                                                        --------------------
Net cash used in investing activities                     (18,600) (102,407)
                                                        --------------------
Effect of exchange rate changes on cash and cash                            
 equivalents                                               (1,653)     (640)
                                                        --------------------
                                                                            
Increase in cash and cash equivalents                       5,096    11,789 
Cash and cash equivalents - beginning of period             5,921     6,873 
                                                        --------------------
                                                                            
Cash and cash equivalents - end of period                  11,017    18,662 
                                                        --------------------
                                                        --------------------
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Reconciliation of EBITDA and Adjusted EBITDA                                
For the three and nine months ended September 30, 2013 and 2012             
(in thousands of Canadian dollars, except per share data)                   
(unaudited)                                                                 
                                                                            
                                     Three months ended   Nine months ended 
                                      Sep 30,   Sep 30,   Sep 30,   Sep 30, 
                                         2013      2012      2013      2012 
----------------------------------------------------------------------------
Net income (loss)                       3,281    (2,935)    8,008    (3,307)
Tax expense                             1,990     1,321     6,343     3,011 
Interest expense                        1,495     2,512     5,278     5,511 
Amortization of intangibles                76        76       228       228 
Depreciation of property and                                                
 equipment                             12,740     6,616    30,381    17,215 
----------------------------------------------------------------------------
EBITDA                                 19,582     7,590    50,238    22,658 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                     Three months ended   Nine months ended 
                                      Sep 30,   Sep 30,   Sep 30,   Sep 30, 
                                         2013      2012      2013      2012 
                                                                            
EBITDA                                 19,582     7,590    50,238    22,658 
                                                                            
Adjustments for non-cash and one-                                           
 time gains and losses                 (1,799)   (3,131)    3,626    (2,597)
----------------------------------------------------------------------------
Adjusted EBITDA                        17,783     4,459    53,864    20,061 
----------------------------------------------------------------------------
Adjusted EBITDA per share ($)            0.22      0.07      0.67      0.30 
----------------------------------------------------------------------------
Net income (loss) per share ($)          0.04     (0.04)     0.10     (0.05)
----------------------------------------------------------------------------
                                                                            
Adjusted EBITDA attributable to:                                            
  Owners of the parent                 17,686     4,063    52,596    18,766 
  Non-controlling interest                 97       396     1,268     1,295 
----------------------------------------------------------------------------
                                       17,783     4,459    53,864    20,061 
----------------------------------------------------------------------------
                                                                            
                                     Three months ended   Nine months ended 
                                      Sep 30,   Sep 30,   Sep 30,   Sep 30, 
                                         2013      2012      2013      2012 
                                                                            
Stock-based compensation                  536       141       966     1,172 
(Gain) loss on sale of equipment          (26)      135         5       143 
Foreign exchange (gain) loss           (1,676)   (3,103)    3,469    (2,727)
Change in fair value of financial                                           
 instrument                              (656)     (885)     (894)   (1,851)
Loss on damage of property and                                              
 equipment                                  -       538         -       538 
Other expense                              23        42        80       128 
----------------------------------------------------------------------------
                                       (1,799)   (3,132)    3.626    (2,597)
----------------------------------------------------------------------------

Contacts:
Xtreme Drilling and Coil Services Corp.
Matt Porter
Chief Financial Officer
+1 281 994 4600
ir@xtremecoil.com
www.xtremecoil.com

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