Estrella International Energy Services Ltd. Announces Filing of 2013 Annual Statements and Operational Update

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES 

Estrella International Energy Services Ltd. ("Estrella" or the "Company") (TSX
VENTURE:EEN) announces that it has filed its Audited Consolidated Financial
Statements and the related Management's Discussion and Analysis ("MD&A") for the
year-ended December 31, 2013. Copies of these documents can be found on the
SEDAR website at www.sedar.com. 


Carlos Valencia, the Company's CEO commented, "2013 has been a key year in the
growth of Estrella. With the acquisition of SAIC, the Company became the leader
in the Colombian Market and a very relevant regional player with 45 rigs. The
integration of SAIC with our original Colombian Operations and with the rest of
the Company is developing as planned, and the benefits of the acquisition are
starting to materialize through improvements to our results. We have implemented
a combined organization, merged offices and some bases, and jointly market our
Rigs in the Region. We have begun the implementation of a new ERP system for the
combined group that we expect to have completed by the end of the year in
Colombia and roll over to the rest of countries in 2015. We set a stronger focus
of the organization into key markets, by moving Bolivian and Chilean drilling
assets to Argentina and are gaining important scale improving profitability
significantly in this country. We improved our debt position significantly by
repaying Credit Suisse Debt in full and significantly reducing the leverage of
the acquired SAIC. We are very positive for 2014 as we expect all these
initiatives to pay off in the form of a stronger revenue growth, leaner Opex and
reduced SG&A, which we hope will result in a material increase in EBITDA for
2014." 


Financial Highlights for the Year ended December 31, 2013 (all dollar amounts
are US$ '000) 


For the year ended December 31, 2013, Estrella's revenue increased by 108% to
$132,154 ($63,536 in 2012). This increase in revenues was primarily due to the
acquisition of SAIC plus rig utilization improvement for the existing rig fleet
prior to acquisition. 


This revenue was offset by oilfield expenses of $112,383 ($57,606 in 2012),
general and administrative expenses of $12,897 ($12,590 in 2012) and interest
expenses of $8,895 ($8,961 in 2011). In addition, the Company realized non-cash
results totalling $19,203; these include depreciation and amortization of
$23,321, an FX gain of $2,481, and a gain on bargain purchase related to SAIC's
acquisition of $1,637 impairment. As the result of the forgoing and other income
of $1,142, transaction expenses related to the acquisition of SAIC of $2,116 and
an income tax recovery of $1,011, the Company recorded a net loss for the year
of $21,287 or ($7,42) per common share ($14,53 in 2012). 


Rig utilization for the year increased to 55% in 2013 (46% in 2012). The
utilization in Argentina of Drilling Rigs increased to 75% (58% in 2012), with
strong increase of fleet as 2 rigs were mobilized to Argentina, the first one
from Chile in Q4 2012 and the second from Bolivia in Q3 2013. The 3 rig drilling
fleet is now under contract and the utilization has not been higher due to
start-up preparation of the rigs for new multiyear contracts with YPF. As of
today the 3 rigs are under contract, but during 2013 most of the improvements
came from rig 1201, while improvements from rig 1001 are expected to materialize
in 2014. With respect to the workover fleet in Argentina, the utilization
remained strong. 


In Colombia, utilization of rigs for the 2013 was 62% (23% in 2012). The higher
utilization was driven by the acquisition of SAIC which increased the fleet of
drilling rigs in Colombia to 23 (3 in 2012). Work Over rigs improved the
utilization to 33% (22% in 2012), but remain a commercial challenge for the
firm. A new multi-rig contract was signed with Oxy in Q1, this will increase
utilization of the workover fleet in Colombia materially starting Q2 2014.
Peru's WO fleet had a 83% utilization (48% in 2012) with the 2 rigs on contract.
An additional rig has been moved from Colombia to Peru starting to work in Q2
2014, hence our expectation of improvements for year 2014. 


E&P services revenue reached $16,341, representing 12.4% of revenues. This
business is composed principally of the cementing business in Colombia acquired
with SAIC and the directional drilling business in Argentina, both business with
high growth potential.


Operational Update for 2013 and Q1 2014 (all dollar amounts are US$ '000) 

In Argentina, Rig 1001 has been mobilized from Bolivia, and has started
operation on a 5+1 year contract for YPF in the Neuquen basin. This brings
Estrella's rig count in Argentina to 6, all of which are operating on long term
contracts. 


In Peru, Rig 202 has been mobilized from Colombia and will enter operations
alongside Rigs 201 and 204, in Talara. Rig has won a bid for a 5-month contract.
Several customers are requiring the service of our rigs in Talara, which we
expect to drive our price and profitability upwards. 


In Colombia, the following contract extensions and awards have been received:



--  Drilling rig 2027, a key 2000 HP AC rig in the fleet, has been extended
    for 2 years through to April 2016 and rig 2031 is in a 5 year leased
    contract in Argentina. 
    
--  Drilling rigs 707, 909 and 910 have all been awarded a one year contract
    extension, while 722 got a 2 year extension with Pacific Rubiales. 
    
--  Drilling rigs 701(1), 733, 1008, 1232, 1516, 1517, 1523 and 1724 are
    also operational with recent contract awards and / or renewals. 
    
--  Oxy has awarded a 1-year, 6 workover rigs contract to Estrella for La
    Cira Infantes field. There are also plans to increase the fleet awarded
    in the next months; this contract will utilize as minimum 42% of
    Colombia's workover fleet. 
    
--  We have done significant workover jobs within the scope of our contract
    to manage some of Ecopetrol's marginal fields in our JV with Skanska and
    we expect this activity to continue growing. 
    
--  We are investing in the overhaul of rig 2029, a 2000 Hp rig that has
    been cold-stacked for 2 years, and is expected to start operations in Q2
    2014 



(1) Leased rig for a 6 month contract 

During Q1, 2014 the utilization of the Colombian fleet was of 62% for drilling
rigs, and 13% for workover rigs. 


The utilization for Estrella's entire rig fleet in Q1 in Latin America was of
51% (64% for drilling and 33% for workover). 


The Company is also seeing strong activity from our Directional Drilling
business in Argentina for the first Quarter of 2014, with an average of 6.7 jobs
per month (3.7 in 2013) and 52 days per month invoiced (36 in 2013). Activity in
the country is expected to continue to strengthen during the 2014 calendar year.



Finally, the Company is currently reviewing some growth opportunities, rig
additions and small acquisitions, which may result in additional revenue and
EBITDA improvements for 2014. The Company expects to secure these opportunities
in the coming months and fund them with a combination of additional debt and a
capital increase on the Company.


About Estrella 

Estrella is an oil and natural gas, geothermal and mining service company with
operations throughout Latin America. It provides conventional drilling services,
directional drilling services, tools and equipment sales and rentals, work-over
services and consulting and engineering services. The Corporation is
headquartered in Buenos Aires, Argentina and has operating locations in six
countries of Latin and South America. 


Forward-Looking Statements 

This press release may contain forward-looking statements which reflect
management's expectations regarding future growth, results of operations,
performance and business prospects of Estrella. These forward-looking statements
may relate to, among other things, forecasts or expectations regarding business
outlook for Estrella, commodity prices for oil and natural gas, oil and natural
gas demand and production growth, debt service requirements for Estrella,
improvements in operating procedures and technology, capital expenditures by
Estrella and the oil and gas industry, the business strategies of Estella's
customers, future global economic conditions, and future results of operations,
expectations regarding the Corporation's ability to raise capital, realization
of the anticipated benefits of acquisitions and dispositions, revenue growth,
future acquisitions, generation of cash flow, and may also include other
statements that are predictive in nature, or that depend upon or refer to future
events or conditions, and can generally be identified by words such as "may",
"will", "expects", "anticipates", "intends", "plans", "believes", "estimates",
"guidance" or similar expressions. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances are forward-looking statements. These statements are not
historical facts or guarantees of future performance, but instead represent
management's current expectations, estimates and projections regarding future
events. 


The reader is cautioned that assumptions used in the preparation of any
forward-looking information may prove to be incorrect. Events or circumstances,
such as future availability of capital on favourable terms, may cause actual
results to differ materially from those predicted, as a result of numerous known
and unknown risks, uncertainties, and other factors, many of which are beyond
the control of Estrella. The reader is cautioned not to place undue reliance on
any forward-looking information. Such information, although considered
reasonable by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated. Forward-looking
statements contained in this press release are expressly qualified by this
cautionary statement. The forward-looking statements contained in this press
release are made as of the date of this press release, and Estrella does not
undertake any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by securities law.


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SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT
THEREFROM. 


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Estrella International Energy Services Ltd.
Carlos Valencia
Chief Executive Officer
[phone] / [phone]
[phone] (FAX)


Estrella International Energy Services Ltd.
Javier Vedoya
Chief Financial Officer
[phone] / [phone]
[phone] (FAX)
[e-mail]
www.estrellasp.com