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Xtreme Drilling and Coil Services Announces Second Quarter 2014 Operating and Financial Results

CALGARY, ALBERTA -- (Marketwired) -- 08/08/14 -- Xtreme Drilling and Coil Services ("Xtreme" or the "Company") (TSX:XDC) announces summary results for the three and six months ended June 30, 2014. It is anticipated that filing will take place on SEDAR of the Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis on Friday, August 8, 2014.

Highlights - Q2 2014


--  Adjusted EBITDA was $19.4 million for the second quarter, a decrease of
    6% over the previous quarter and an increase of 15% over the second
    quarter of 2013. The decrease from the prior quarter was primarily due
    to normal Canadian seasonality as well as one less XSR coiled tubing
    unit in operation during the quarter. The unit was damaged during a
    routine operation and spent the entire quarter under repair and returned
    to work in mid-July. The decrease was offset by mobilization revenue
    recognized for the two rigs upgraded and shipped to India during the
    second quarter. 

--  Revenue was $62.3 million in the second quarter of 2013, or a decrease
    of 11% over the previous quarter. The decrease in revenue for the
    quarter was a function of fewer operating days in Canada as well as the
    US XSR segment. Revenue per operating day increased significantly to
    $35.0 thousand from $32.7 thousand in the first quarter. The increase is
    attributed to the mobilization revenue for the two rigs shipped to India
    during the quarter. 

--  The Company had 1,779 operating days, or 351 fewer days than the first
    quarter of 2014. This resulted in a utilization rate of 73% for the
    fleet of 21 XDR drilling rigs and 7 XSR coiled tubing units. 
    
    The drilling segment achieved utilization of 75% on 1,433 operating
    days. This is comprised of an 84% utilization rate in the US XDR fleet
    and 22% for the Canadian XDR rigs. The decrease in US utilization was
    based on the fact that the two rigs shipped to India did not record
    operating days for the quarter. They did generate mobilization revenue
    in the quarter through a one-time payment made by the customer as part
    of the initial mobilization of the rigs to India. In addition, we had a
    XDR 500 rig down for approximately six weeks for a major inspection and
    recertification prior to going to a new client.
    
    For the second quarter, the coil services segment achieved utilization
    of 68% on 346 operating days. The utilization was negatively affected by
    one unit that was idle for the entire period due to damage sustained in
    a routine operation. 

--  The Company recognized a Net Loss of $0.9 million or $.01 per fully
    diluted share for the second quarter. This includes a loss on disposal
    of equipment of $3.9 million during the quarter. Excluding this charge,
    net income would have been approximately $2.1 million or $.03 per share.

--  The Company paid down an additional $5.3 million in debt during the
    quarter. Net debt at quarter end was $105.4 million in Canadian Dollars.
    At quarter end, all but $2.0 million of the Company's debt was
    denominated in US dollars and translated for financial reporting
    purposes to Canadian Dollars. Xtreme exited the quarter with
    approximately $34.0 million available on the Company's revolving credit
    facility and working capital of $43.5 million. The funded debt to EBITDA
    ratio as calculated for the Company's credit facility was 1.8x, which is
    well under the credit facility covenant level of 3.0. In addition, the
    net debt to EBITDA ratio dropped to 1.2x for the second quarter. Capital
    expenditures totaled $21.0 million for the quarter with a target full
    year 2014 capital budget of $70.0 to $72.0 million which is anticipated
    to be funded through operating cash flow.

Selected Quarterly Financial Information (unaudited)
                                                                            
                                      Jun 30,   Mar 31,   Dec 31,   Sep 30, 
Three months ended                       2014      2014      2013      2013 
----------------------------------------------------------------------------
Revenue                                62,299    69,703    62,681    59,692 
Adjusted EBITDA (1)                    19,421    20,635    19,734    17,783 
Adjusted EBITDA as a percentage of                                          
 Revenue                                   31        30        31        30 
Adjusted EBITDA per share (1) -                                             
 basic ($)                               0.24      0.25      0.24      0.22 
Net (loss)income                         (902)    2,896    (7,441)    3,281 
Net income (loss) per share - basic                                         
 ($)                                    (0.01)     0.04     (0.09)     0.04 
Capital assets                        413,296   423,204   412,523   416,887 
Total assets                          513,651   532,116   515,720   504,728 
Net debt (2)                          105,358   125,389   116,856   110,326 
----------------------------------------------------------------------------
Operating days (1)                      1,779     2,130     2,141     2,062 
Utilization (percentage) - XDR             75        90        93        90 
Utilization (percentage) - XSR             68        78        76        76 
Utilization (percentage) - Total           73        88        90        87 
Weighted average rigs in service         28.0      28.0      28.0      28.0 
Total rigs, end of quarter                 28        28        28        28 
----------------------------------------------------------------------------
                                                                            
                                      Jun 30,   Mar 31,   Dec 31,   Sep 30, 
                                         2013      2013      2012      2012 
----------------------------------------------------------------------------
Revenue                                53,268    54,182    51,813    48,948 
Adjusted EBITDA (1)                    16,847    19,234    15,029     4,459 
Adjusted EBITDA as a percentage of                                          
 Revenue                                   32        35        29         9 
Adjusted EBITDA per share (1) -                                             
 basic ($)                               0.21      0.24      0.19      0.07 
Net income (loss)                         239     4,487     4,579    (2,935)
Net income (loss) per share - basic                                         
 ($)                                     0.00      0.06      0.06     (0.04)
Capital assets                        431,294   417,431   415,354   425,364 
Total assets                          520,326   508,823   506,551   511,318 
Net debt (2)                          127,977   130,014   141,841   119,759 
----------------------------------------------------------------------------
Operating days (1)                      1,911     1,949     1,891     1,742 
Utilization (percentage) - XDR             85        89        85        86 
Utilization (percentage) - XSR             65        60        58        45 
Utilization (percentage) - Total           81        83        80        77 
Weighted average rigs in service         28.0      28.0      26.8      26.0 
Total rigs, end of quarter                 28        28        28        28 
----------------------------------------------------------------------------

(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 six months ended June 30, 2014

Outlook

Activity remained strong in Xtreme's core operating areas of the Eagle Ford, Niobrara and Bakken during the second quarter. Production from each of these tight oil resource plays continues to surge higher with the Eagle Ford and Bakken being the largest producers of oil and condensates in the United States. The trend toward faster moving higher specification rigs has benefitted Xtreme as the fleet of 21 XDR drilling rigs and seven XSR coiled tubing units are all AC electric, tier 1 quality. Because of this Xtreme is well positioned to take advantage of the many opportunities in the US unconventional resource play market. Whereas many of our drilling and service competitors focus has been on upgrading technology and fleet quality.

The Company is excited by the opportunity of a new growth market for drilling services in India. Two XDR 300 rigs were shipped to the country during the second quarter. The XDR 300 rig is a tier 1 rig which is an ideal fit for markets that have slightly shallower well profiles but still demand the performance of an AC electric drilling rig. India fit this profile well and we have partnered with a new customer that is working to build efficiencies and improve their drilling program. This deployment fits with Xtreme's strategy of optimizing the fleet by moving into regions that value and will pay a premium for drilling performance with technology. As of this release one rig had begun operations with the second rig likely to start in the next week. It is anticipated that the initial contract will have a term of 15 to 18 months with the opportunity of additional wells upon completion.

In the United States XDR drilling activity remained robust. Prospects for contract renewals in the coming six months appear strong. We have seven rigs with contracts that expire by the end of 2014. We are confident that each of these should contract at slightly higher rates and a majority of the rigs should re-contract with the current customer. During the second quarter Xtreme continued to invest in the existing fleet. We are committed to drive performance through a focus on planned maintenance, crew training and safety. As we implement these new processes we saw margins slightly compress in the first half of 2014. However, we have begun to see the benefits of this focus as our fleet downtime has decreased by roughly 50% over the past 12 months. In addition, we anticipate drilling margins will trend higher as repair and maintenance expenses come down over the second half of 2014. In Canada XDR drilling activity was slow in the second quarter with the seasonal road bans. The three XDR 200 rigs in Canada are back working and scheduled to operate through March of 2015.

In the US XSR division, coiled tubing demand remained far greater that our ability to supply services. As previously announced one of the units was idle for the entire second quarter. It had an incident during a routine operation that caused damage. Revenue was down for the quarter in this segment due to the incident. The unit is back to work and we anticipate that activity will remain strong in the Eagle Ford for the remainder of the year. The combination of our proprietary technology with AC electric units and large diameter 2 5/8" coiled tubing continues to provide significant value to our customers. The Company is on target to deliver two new XSR units to South Texas in October and December of this year and six additional units in 2015 and 2016. Several potential customers have already inquired as to availability and delivery schedules of the new units. We anticipate that the trend towards larger diameter coil in the Eagle Ford will only increase in the future as operators are able to mitigate downhole issues and complete wells to greater lengths. Based on this Xtreme is very confident that we can grow our market share in South Texas and potentially other regions through our new build program.

In Saudi Arabia performance remains very strong. The operation has been an exciting example of the benefits of coiled tubing drilling. Xtreme continues to pursue additional opportunities in Saudi and other markets that see the potential value in underbalanced coiled tubing drilling. We anticipate during the second half of the year our customer in Saudi Arabia will make a final decision on the need for additional units on this project. We remain cautiously optimistic that we can add units into this market.

Second Quarter Conference Call

Xtreme has scheduled a conference call on Friday, August 8, 2014, at 10:00 am MDT, 11:00 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.

+1 866-225-0198 (North America Toll-Free) or +1 416-340-2216 (Alternate)

http://www.gowebcasting.com/5630

An audio replay of the call will be available until Friday, August 15, 2014. To access the replay, call +1 800-408-3053 or +1 905-694-9451 and enter pass code 4791073.

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 August 7, 2014, 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 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.

In preparing this news release, management considered the following risk factors: fluctuations in crude oil and natural gas prices, supply and demand; fluctuation in foreign currency exchange and interest rates; financial stability of Xtreme's customers; current and future applications for Xtreme's proprietary technology; competition from other drilling 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 political and military events.

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

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 (XDR) and Coil Services (XSR) under contracts with oil and natural gas exploration and production companies and integrated oilfield service providers in Canada, the United States, Saudi Arabia and India. For more information about the Company, please visit www.xtremecoil.com.


Xtreme Drilling and Coil Services Corp.                                     
Interim Consolidated Statements of Financial Position                       
(in thousands of Canadian dollars)                                          
(unaudited)                                                                 
                                                                            
                                               June 30, 2014   Dec 31, 2013 
                                              ------------------------------
                                              ------------------------------
Assets                                                                      
Current assets                                                              
  Cash and cash equivalents                           18,242         12,220 
  Accounts receivable                                 45,727         60,084 
  Other receivables                                    1,431          1,306 
  Prepaid expenses and other                           6,157          2,491 
  Income tax recoverable                                 583            462 
  Inventory                                           11,091          8,181 
                                              ------------------------------
                                                      83,231         84,744 
Non-current assets                                                          
Deferred tax asset                                    13,359         14,536 
Property and equipment                               413,296        412,523 
Intangible assets                                      3,765          3,917 
                                              ------------------------------
Total Assets                                         513,651        515,720 
                                              ------------------------------
                                              ------------------------------
                                                                            
Liabilities and Equity                                                      
Current liabilities                                                         
  Accounts payable and accrued liabilities            38,179         28,051 
  Fair value of non-controlling interest                                    
   liability                                               -         12,763 
  Current portion of provision                         1,601              - 
  Current portion of long-term debt                        -            669 
                                              ------------------------------
                                                      39,780         41,483 
Long-term liabilities                                                       
Fair value of non-controlling interest                                      
 liability                                                 -          1,596 
Long-term portion of provision                         1,601              - 
Long-term debt                                       123,600        128,407 
                                              ------------------------------
Total Liabilities                                    164,981        171,486 
                                              ------------------------------
                                                                            
Shareholders' equity                                                        
Share capital                                        331,101        328,416 
Share option reserve                                  12,937         12,419 
Accumulated deficit                                  (11,082)       (12,697)
Foreign currency translation reserve                  15,714         15,143 
                                              ------------------------------
                                                     348,670        343,281 
Non-controlling interest                                   -            953 
                                              ------------------------------
Total Shareholders' Equity                           348,670        344,234 
                                              ------------------------------
Total Liabilities and Shareholders' Equity           513,651        515,720 
                                              ------------------------------
                                              ------------------------------
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Interim Consolidated Statements of (Loss) Income                            
For the three and six months ended June 30, 2014 and 2013                   
(in thousands of Canadian dollars, except share and per share data)         
(unaudited)                                                                 
                                                                            
                                   Three months ended      Six months ended 
                                --------------------------------------------
                                --------------------------------------------
                                  June 30,   June 30,   June 30,   June 30, 
                                      2014       2013       2014       2013 
                                --------------------------------------------
Revenue                             62,299     53,268    132,002    107,450 
                                                                            
Expenses                                                                    
Operating expenses                  38,383     33,560     83,450     65,957 
General and administrative                                                  
 expenses                            4,495      2,861      8,496      5,412 
Change in fair value of non-                                                
 controlling interest liability          -        (31)         -       (238)
Depreciation of property and                                                
 equipment                          13,328      9,098     26,558     17,641 
Amortization of intangibles             76         76        152        152 
Stock-based compensation               671        210      1,387        430 
Foreign exchange loss                   86      3,272         75      5,145 
Loss (gain) on disposal of                                                  
 equipment                           3,884       (117)     3,903         31 
Other (income) expenses                (17)        21         12         57 
Interest expense                     1,066      1,664      2,292      3,783 
                                --------------------------------------------
                                --------------------------------------------
Income before tax for the period       327      2,654      5,677      9,080 
                                                                            
Tax expense                                                                 
Current                              1,219        894      2,503      1,612 
Deferred                                10      1,521      1,180      2,741 
                                --------------------------------------------
                                --------------------------------------------
Total tax expense                    1,229      2,415      3,683      4,353 
                                                                            
Net (loss) income for the period      (902)       239      1,994      4,727 
                                --------------------------------------------
                                --------------------------------------------
                                                                            
Net (loss) income attributable                                              
 to                                                                         
  Owners of the parent                (902)       (73)     1,994      4,040 
  Non-controlling interest               -        312          -        687 
                                --------------------------------------------
                                      (902)       239      1,994      4,727 
                                --------------------------------------------
                                --------------------------------------------
                                                                            
                                                                            
Net (loss) income per common                                                
 share attributable to equity                                               
 owners of the parent                                                       
- basic                              (0.01)      0.00       0.02       0.01 
- diluted                            (0.01)      0.00       0.02       0.01 
                                                                            
Weighted average number of                                                  
 common shares                                                              
- basic                         81,574,045 80,790,315 81,389,932 80,790,315 
- diluted                       82,595,009 81,200,643 82,342,017 81,098,340 
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Interim Consolidated Statements of Comprehensive (Loss) Income              
For the three and six months ended June 30, 2014 and 2013                   
(in thousands of Canadian dollars)                                          
(unaudited)                                                                 
                                                                            
                                     Three months ended    Six months ended 
                                    ----------------------------------------
                                    ----------------------------------------
                                     June 30,  June 30,  June 30,  June 30, 
                                         2014      2013      2014      2013 
                                    ----------------------------------------
Net (loss) income for the period         (902)      239     1,994     4,727 
Other comprehensive (loss) income                                           
Items that may be subsequently                                              
 reclassified to profit or loss                                             
Unrealized (loss) gain on                                                   
 translating financial statements of                                        
 foreign operations                   (11,896)   14,384       571    22,154 
Dividends declared to non-                                                  
 controlling interest partner               -         -    (1,332)        - 
                                    ----------------------------------------
Comprehensive (loss) income for the                                         
 period                               (12,798)   14,623     1,233    26,881 
                                    ----------------------------------------
                                    ----------------------------------------
                                                      
                                                      
Xtreme Drilling and Coil Services Corp.               
Interim Consolidated Statements of Changes in Equity  
For the six months ended June 30, 2014 and 2013       
(in thousands of Canadian dollars)                    
(unaudited)                                           
                                                                            
                         Equity attributable to the owners of the parent    
                                                                            
                                                          Foreign           
                                    Share                currency           
                          Share    option Accumulated translation           
                        capital   reserve     deficit     reserve     Total 
                      ------------------------------------------------------
                      ------------------------------------------------------
Balance at Jan 1, 2013  327,197    11,572     (12,370)    (11,314)  315,085 
                      ------------------------------------------------------
                      ------------------------------------------------------
Net income for the                                                          
 year                         -         -       4,040           -     4,040 
Other comprehensive                                                         
 income                                                                     
  Currency translation                                                      
   differences                -         -           -      21,551    21,551 
                      ------------------------------------------------------
Total comprehensive                                                         
 income                       -         -       4,040      21,551    25,591 
                      ------------------------------------------------------
Employee share option                                                       
 scheme:                                                                    
  Value of employee                                                         
   services                   -       430           -           -       430 
  Proceeds from shares                                                      
   issued                   (13)        -           -           -       (13)
                      ------------------------------------------------------
Total transactions                                                          
 with owners                (13)      430           -           -       417 
                      ------------------------------------------------------
Balance at Jun 30,                                                          
 2013                   327,184    12,002      (8,330)     10,237   341,093 
                      ------------------------------------------------------
                      ------------------------------------------------------
Balance at Jan 1, 2014  328,416    12,419     (12,697)     15,143   343,281 
                      ------------------------------------------------------
                      ------------------------------------------------------
Net income for the                                                          
 year                         -         -       1,994           -     1,994 
Other comprehensive                                                         
 income                                                                     
  Currency translation                                                      
   differences                -         -           -         571       571 
  Dividends declared                                                        
   to non-controlling                                                       
   interest partner           -         -           -           -         - 
  Settlement for the                                                        
   purchase of non-                                                         
   controlling                                                              
   interest partner           -         -        (379)          -      (379)
                      ------------------------------------------------------
Total comprehensive                                                         
 income                       -         -       1,615         571     2,186 
                      ------------------------------------------------------
Employee share option                                                       
 scheme:                                                                    
  Value of employee                                                         
   services                 868     1,386           -           -     2,254 
  Proceeds from shares                                                      
   issued                 1,817      (868)          -           -       949 
                      ------------------------------------------------------
Total transactions                                                          
 with owners              2,685       518           -           -     3,203 
                      ------------------------------------------------------
Balance at Jun 30,                                                          
 2014                   331,101    12,937     (11,082)     15,714   348,670 
                      ------------------------------------------------------
                      ------------------------------------------------------
                                                                            

                                                                            
                                                                            
                                                                            
                                                        Non-          Total 
                                                 controlling  Shareholders' 
                                                    interest         Equity 
                      ------------------------------------------------------
                      ------------------------------------------------------
Balance at Jan 1, 2013                                 2,922        318,007 
                      ------------------------------------------------------
                      ------------------------------------------------------
Net income for the                                                          
 year                                                    687          4,727 
Other comprehensive                                                         
 income                                                                     
  Currency translation                                                      
   differences                                           603         22,154 
                      ------------------------------------------------------
Total comprehensive                                                         
 income                                                1,290         26,881 
                      ------------------------------------------------------
Employee share option                                                       
 scheme:                                                                    
  Value of employee                                                         
   services                                                -            430 
  Proceeds from shares                                                      
   issued                                                  -            (13)
                      ------------------------------------------------------
Total transactions                                                          
 with owners                                               -            417 
                      ------------------------------------------------------
Balance at Jun 30,                                                          
 2013                                                  4,212        345,305 
                      ------------------------------------------------------
                      ------------------------------------------------------
Balance at Jan 1, 2014                                   953        344,234 
                      ------------------------------------------------------
                      ------------------------------------------------------
Net income for the                                                          
 year                                                      -          1,994 
Other comprehensive                                                         
 income                                                                     
  Currency translation                                                      
   differences                                             -            571 
  Dividends declared                                                        
   to non-controlling                                                       
   interest partner                                   (1,332)        (1,332)
  Settlement for the                                                        
   purchase of non-                                                         
   controlling                                                              
   interest partner                                      379              - 
                      ------------------------------------------------------
Total comprehensive                                                         
 income                                                 (953)         1,233 
                      ------------------------------------------------------
Employee share option                                                       
 scheme:                                                                    
  Value of employee                                                         
   services                                                -          2,254 
  Proceeds from shares                                                      
   issued                                                  -            949 
                      ------------------------------------------------------
Total transactions                                                          
 with owners                                               -          3,203 
                      ------------------------------------------------------
Balance at Jun 30,                                                          
 2014                                                      -        348,670 
                      ------------------------------------------------------
                      ------------------------------------------------------
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Interim Consolidated Statements of Cash Flows                               
For the six months ended June 30, 2014 and 2013                             
(in thousands of Canadian dollars)                                          
(unaudited)                                                                 
                                                        2014           2013 
                                              ------------------------------
                                              ------------------------------
Cash flow provided by:                                                      
Operating activities                                                        
Net income for the period                              1,994          4,727 
  Interest paid                                       (1,448)        (3,988)
  Taxes paid                                          (2,455)             - 
Items not affecting cash:                                                   
  Depreciation and amortization                       26,710         17,793 
  Stock-based compensation                             1,387            430 
  Loss on disposal of equipment                        3,903             31 
  Change in fair value of non-controlling                                   
   interest liability                                      -           (238)
  Interest expense                                     2,292          3,783 
  Amortization of debt issuance costs                   (224)           (38)
  Foreign exchange loss                                   75          5,145 
  Current tax expense                                  2,503          1,612 
  Deferred tax expense                                 1,180          2,741 
  Changes in items of working capital                 12,644             76 
                                              ------------------------------
Net cash generated from operating activities          48,561         32,074 
                                              ------------------------------
Financing activities                                                        
  Proceeds from exercise of stock options              1,818              - 
  Repayment of long-term debt                         (6,006)       (10,429)
  Repayment of operating facility                          -         (7,834)
  Debt issuance cost                                      97            (22)
                                              ------------------------------
Net cash used in financing activities                 (4,091)       (18,285)
                                              ------------------------------
Investing activities                                                        
  Proceeds from sale of equipment                      1,066            548 
  Capital expenditures                               (30,403)       (12,575)
  Buyout of non-controlling interest partner         (11,628)             - 
  Changes in items of working capital relating                              
   to capital items                                    6,446              - 
                                              ------------------------------
Net cash used in investing activities                (34,519)       (12,027)
                                              ------------------------------
Effect of exchange rate changes on cash and                                 
 cash equivalents                                     (3,929)         1,296 
                                              ------------------------------
                                                                            
Increase in cash and cash equivalents                  6,022          3,058 
Cash and cash equivalents - beginning of                                    
 period                                               12,220          5,921 
                                              ------------------------------
                                                                            
Cash and cash equivalents - end of period             18,242          8,979 
                                              ------------------------------
                                              ------------------------------
                                                                            
Xtreme Drilling and Coil Services Corp.                                     
Reconciliation of Adjusted EBITDA                                           
For the three and six months ended June 30, 2014 and 2013                   
(in thousands of Canadian dollars, except per share data)                   
(unaudited)                                                                 
                                     Three months ended   Six months ended  
                                      Jun 30,   Jun 30,   Jun 30,   Jun 30, 
                                         2014      2013      2014      2013 
----------------------------------------------------------------------------
Net (loss) income                        (902)      239     1,994     4,727 
Tax expense                             1,229     2,415     3,683     4,353 
Interest expense                        1,066     1,664     2,292     3,783 
Amortization of intangibles                76        76       152       152 
Depreciation of property and                                                
 equipment                             13,328     9,098    26,558    17,641 
----------------------------------------------------------------------------
EBITDA                                 14,797    13,492    34,679    30,656 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                     Three months ended   Six months ended  
                                      Jun 30,   Jun 30,   Jun 30,   Jun 30, 
                                         2014      2013      2014      2013 
----------------------------------------------------------------------------
EBITDA                                 14,797    13,492    34,679    30,656 
                                                                            
Adjustments for non-cash items          4,624     3,355     5,377     5,425 
----------------------------------------------------------------------------
Adjusted EBITDA                        19,421    16,847    40,056    36,081 
----------------------------------------------------------------------------
Adjusted EBITDA per share ($)            0.24      0.21      0.49      0.45 
----------------------------------------------------------------------------
Net income per share ($)                (0.01)     0.00      0.02      0.05 
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                                     Three months ended    Six months ended 
                                      Jun 30,   Jun 30,   Jun 30,   Jun 30, 
                                         2014      2013      2014      2013 
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Stock-based compensation                  671       210     1,387       430 
Loss (gain) on disposal of equipment    3,884      (117)    3,903        31 
Foreign exchange loss                      86     3,272        75     5,145 
Change in fair value of non-                                                
 controlling interest liability             -       (31)        -      (238)
Other (income) expense                    (17)       21        12        57 
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Total adjustments for non-cash items    4,624     3,355     5,377     5,425 
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