Leader Energy Services Reports 2013 Results

Leader Energy Services Ltd. (TSX VENTURE:LEA) ("Leader" or the "Company") has
released its financial and operating results for the three and twelve month
periods ended December 31, 2013. 


Fourth Quarter Results (000's - unaudited): 



                                 -------------------------------------------
                                  Dec. 31,    Dec. 31,                      
Quarter ended                          2013       2012   $ Change % Change  
                                 -------------------------------------------
                                                                            
Revenue                           $   6,467  $   4,178  $   2,289       55% 
Operating expenses                    5,089      4,550        539       12% 
                                 -------------------------------------------
Gross profit                          1,378       (372)     1,750      n/a  
General and administrative              904      1,008       (104)     (10)%
Amortization                          1,032      1,229       (197)     (16)%
Finance cost                            985        430        555      129% 
Other losses                             31        194       (163)     (84)%
                                 -------------------------------------------
Net Loss                          $  (1,574) $  (3,233) $   1,659      n/a  
                                 -------------------------------------------
                                 -------------------------------------------
Loss per share - Basic            $   (0.05) $   (0.11) $    0.06           
Loss per share - Diluted          $   (0.05) $   (0.11) $    0.06           
EBITDA                            $     443  $  (1,574) $   2,017      n/a  
                                 -------------------------------------------
                                 -------------------------------------------
Adjusted EBITDA                   $     462  $  (1,323) $   1,785      n/a  
                                 -------------------------------------------
                                 -------------------------------------------





                                 -------------------------------------------
                                   Dec. 31,   Dec. 31,                      
Year Ended (000's):                    2013       2012   $ Change % Change  
                                 -------------------------------------------
                                                                            
Revenue                           $  22,667  $  25,016  $  (2,349)      (9)%
Operating expenses                   17,867     20,556     (2,689)     (13)%
                                 -------------------------------------------
Gross profit                          4,800      4,460        340        8% 
General and administrative            3,970      4,384       (414)      (9)%
Amortization                          4,032      3,572        460       13% 
Finance costs                         3,899      2,335      1,564       67% 
Loss on settlement of loans and                                             
 borrowings                             233      1,338     (1,105)     (83)%
Other losses                            109        128        (19)     (15)%
                                 -------------------------------------------
Net Loss                          $  (7,443) $  (7,297) $    (146)     n/a  
                                 -------------------------------------------
                                 -------------------------------------------
Loss per share - Basic and                                                  
 Diluted                          $   (0.25) $   (0.27) $    0.02           
EBITDA                            $     488  $  (1,390) $   1,878      n/a  
                                 -------------------------------------------
                                 -------------------------------------------
Adjusted EBITDA                   $     823  $     292  $     531      182% 
                                 -------------------------------------------
                                 -------------------------------------------



EBITDA refers to net income before finance costs, taxes, depreciation, and
amortization. As the Company has not recorded any provision for income taxes,
taxes have been excluded from the reconciliation. Adjusted EBITDA is calculated
as EBITDA before non-cash losses on the settlement of loans and borrowings,
share based payments and non-recurring dispute settlement charges. EBITDA and
Adjusted EBITDA are not measures that have a standardized meaning and
accordingly may not be comparable to similar measures used by other companies.
Management believes that EBITDA and Adjusted EBITDA are useful measures of cash
flow generated from operations as they eliminate non-cash items, non-recurring
items and the effects of finance costs and financial restructuring. 


Results of Operations

Well Stimulation Services (000's)



                               ---------------------------------------------
                                  Dec. 31,   Dec. 31,                       
Year ended                            2013       2012   $ Change  % Change  
                               ---------------------------------------------
                                                                            
Revenue                         $   22,667 $   25,016 $   (2,349)       (9)%
Operating expenses                  17,867     20,556     (2,689)      (13)%
                               ---------------------------------------------
Gross profit(i)                 $    4,800 $    4,460 $      340         8% 
                               ---------------------------------------------



(i) Management believes that gross profit provides investors with an indication
of profit earned from field activities before administrative costs,
amortization, finance costs, taxes and other. Readers are cautioned that gross
profit should not be considered as an alternative to income determined in
accordance with International Financial Reporting Standards ("IFRS") as an
indicator of the Company's performance. 


For the year ended December 31, 2013, the Company reported revenues of $22.7
million as compared to $25.0 million reported in 2012. Leader continues to
provide larger diameter deep coil services in north-central Alberta and
northeast British Columbia focusing on oil and liquids-rich resource plays. The
reduction in 2013 revenue as compared to 2012 is attributed to lower revenue in
the first and third quarters, partially offset by an increase in activity in the
second and fourth quarters. After a slow start in January and early February,
activity improved significantly in the last six weeks of the first quarter with
Leader remaining active through until the end of March. Although Leader
performed fewer jobs in the first quarter as compared to 2012, a higher
percentage of work required the Company to supply equipment to complete full
service deep coiled tubing jobs utilizing 2" and 2 3/8" coiled tubing units,
nitrogen units and fluid pumpers. In addition to fewer jobs performed in the
quarter, another factor contributing to lower revenues in the first quarter was
the increase in work performed in geographic areas where pricing for services is
historically lower than other areas within the WCSB. As a result of lower prices
charged in these areas, increased competition for available work due to the slow
start in the quarter, and the mix of jobs performed in the quarter, the Company
experienced a small reduction in average pricing on a per job basis as compared
to the first quarter of 2012. In addition to the above, changes in customer
timing resulted in the Company continuing to experience situations where its
equipment was deployed at lower standby rates waiting for work to commence. In
these situations and when the demand for services was at its highest, the
Company was periodically short of qualified personnel due to regular scheduled
days off. At times, this forced the Company to delay upcoming work and in some
circumstances turn down potential jobs while equipment and personnel were not
available.


After a strong finish to the first quarter and despite the effects of spring
break-up, the Company reported second quarter revenues 15% higher than the same
period in 2012. This increase was attributed to the completion of some large
deep coil jobs during the second quarter, which kept all services active while
these jobs were in process combined with an increase in the utilization of
nitrogen pumpers. During the second quarter, the number of nitrogen jobs
completed by the Company increased by 30%, including some stand-alone nitrogen
jobs where the Company was required to supply significant volumes of nitrogen
having a positive effect on reported revenue. During the third quarter, the
Company continued to experience an increase in stand-alone nitrogen work;
however, the June flood in Alberta and wet weather delayed full service coiled
tubing work in the third quarter contributing to lower reported revenues. After
a slower than expected third quarter, activity improved in both the full service
coiled tubing work and stand-alone nitrogen work during the fourth quarter. The
Company reported revenues of $6.5 million in the fourth quarter, an increase of
$1.2 million from the third quarter and a 55% increase over the fourth quarter
of 2012. In the quarter, the Company performed a higher number of full service
deep coiled tubing jobs utilizing 2" and 2 3/8" coiled tubing leading to higher
average revenues per job as compared to the fourth quarter in 2012. In addition,
the Company continued to experience an increase in stand-alone nitrogen work,
particularly in October and November, where the Company supplied significant
volumes of nitrogen. This led to an improvement in equipment utilization and an
increase in the job count as compared to the third quarter of 2013 and the
fourth quarter of the prior year. In the fourth quarter of 2012 revenue was also
lower due to the increase in standby days on work in Saskatchewan.


The Company exited 2013 with six coiled tubing units plus one reel trailer
capable of 2-3/8" deep coil applications, seven nitrogen pumpers and three fluid
pumpers. Three of the coiled tubing units and one reel trailer are classified as
"deep" coil units. The Company has the equipment capable of running up to six
coiled tubing jobs concurrently.


For the year ended December 31, 2013, the Company reported operating costs of
$17.9 million as compared to $20.6 million for the year ended December 31, 2012.
As a percentage of revenue, operating costs decreased by 3.4% as compared to
2012. Savings in repair and maintenance and third party equipment rentals and
transportation charges contributed to the decrease in variable costs. These
savings were partially offset by higher coiled tubing charges resulting from the
Company utilizing a higher percentage of larger diameter coiled tubing which is
more expensive than smaller diameter coiled tubing (particularly in the first
half of 2013), higher fuel costs due to an increase in equipment on location
(with the addition of fluid pumpers added to the fleet and support trailers
utilized on the deep coil jobs) and higher nitrogen charges to support the deep
coiled tubing jobs and the increase in stand-alone nitrogen work particularly in
the latter half of the year. In 2013, the Company benefited from its capital
expenditure initiatives to purchase equipment to reduce the reliance on third
party transportation. As a result of cost reduction initiatives implemented in
late 2012 and to coincide with spring break-up, the Company also saved over $1.1
million in operational salaries and benefits during 2013.


The Company reported a loss of $7.4 million for the year ended December 31,
2013, compared to a loss of $7.3 million in the year ended December 31, 2012.
Despite lower revenues, the Company improved its field profitability by 8% to
$4.8 million and Adjusted EBITDA by 182% to $0.8 million. 


Outlook

The Company anticipates improved operating results in 2014. Year to date revenue
has shown some improvement over the same period last year. In the shorter term,
utilization rates are expected to improve as commodity prices remain buoyant and
customers expand their resources in various plays including the Duvernay,
Montney and Horn River areas. If various west coast liquefied natural gas (LNG)
export pipelines begin to receive regulatory approval, the long-term demand for
all of the Company's services will be positively impacted. Management remains
focused on cost management initiatives, and continues to evaluate various
alternatives to reduce its borrowing costs and overall debt levels.


Other

Additional information can be found on SEDAR at www.sedar.com or the Company web
site at www.leaderenergy.com. The number of common shares issued and outstanding
at the date hereof is 29,388,021 which does not include 2,343,000 unexercised
stock options and 400,000 share purchase warrants.


Forward-looking information

This press release contains certain statements or disclosures relating to the
Company that are based on the expectations of the Company as well as assumptions
made by and information currently available to the Company which may constitute
forward-looking information under applicable securities laws. All such
statements and disclosures, other than those of historical fact, which address
activities, events, outcomes, results or developments that the Company
anticipates or expects may, or will occur in the future (in whole or in part)
should be considered forward-looking information.


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 news release.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Leader Energy Services Ltd.
Rod Hauser
President & CEO
[phone]
[e-mail]


Leader Energy Services Ltd.
Jason Krueger, CFA
Executive VP & Director
[phone]
[e-mail]


Leader Energy Services Ltd.
Graham Reid, CA
VP Finance & CFO
[phone]
[e-mail]
www.leaderenergy.com