Leader Energy Services Reports First Quarter 2013 Results

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




Performance Summary                                                         
(000's) (unaudited)                                                         
                                --------------------------------------------
                                 Mar. 31,    Mar. 31,                       
Quarter ended                         2013       2012   $ Change  % Change  
                                --------------------------------------------
                                                                            
Revenue                          $   8,267  $  11,072  $  (2,805)      (25)%
Operating Expenses                   5,619      6,720     (1,101)      (16)%
                                --------------------------------------------
                                     2,648      4,352     (1,704)      (39)%
General and Administrative           1,011      1,278       (267)      (21)%
Amortization                           991        710        281        40% 
Finance cost                         1,190        879        311        35% 
Loss on settlement of loans and                                             
 borrowings                            233        576       (343)      (60)%
Other losses (gains)                    59        (28)        87       n/a  
                                --------------------------------------------
Net (Loss) Income                $    (836) $     937  $  (1,773)      n/a  
                                --------------------------------------------
                                --------------------------------------------
Earnings per share - Basic       $   (0.03) $    0.05  $   (0.08)           
Earnings per share - Diluted     $   (0.03) $    0.04  $   (0.07)           
EBITDA(i)                        $   1,669  $   3,105  $  (1,436)      (46)%
                                --------------------------------------------
                                --------------------------------------------



(i) EBITDA means income before finance costs, loss on settlement of loans and
borrowings, taxes, amortization, other losses (gains), and share based payments.
Readers are cautioned that EBITDA is generally regarded as an indirect measure
of operating cash flow, and, as such, the Company believes it is a significant
indicator of success of public companies, and is particularly relevant to
readers within the investment community. EBITDA is not a measure that has a
standardized meaning and accordingly may not be comparable to similar measures
used by other companies.


Revenues from well stimulation services decreased to $8.3 million in the first
quarter ended March 31, 2013 as compared to $11.1 million in the first quarter
ended March 31, 2012. This 25% decrease in revenue is mainly attributed to a
slow start to winter drilling activity, a small reduction in average pricing for
Leader's services on a per job basis, the continued effect of equipment on
standby, and the availability of personnel to operate the equipment at certain
times during the quarter. After the 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. In the quarter, Leader
performed fewer jobs as compared to the prior period; however 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. Based on this activity in the quarter, the
Company continued to see demand for deeper, larger diameter coil equipment
applicable to the horizontal drilling market where the Company concentrates its
operations in north-central Alberta and northeast British Columbia. In addition
to fewer jobs performed in the quarter, another factor contributing to lower
revenues 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.


During the first quarter of 2013, the Company's fleet consisted of 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 first quarter ended March 31, 2013, the Company reported operating costs
of $5.6 million as compared to $6.7 million in the same quarter in 2012. As a
percentage of revenue, operating costs have increased 7% as compared to
operating costs reported in the first quarter of the prior period. Higher costs
as a percentage of revenue is mainly attributed to lower revenues earned to
cover the variable and fixed cost structures required to retain qualified
personnel and operate the equipment in the field. Higher variable costs include
coiled tubing charges, fuel costs, costs for nitrogen and chemicals and field
staff variable compensation. During the quarter, the Company performed a larger
percentage of full service deep coiled tubing jobs. As a result, the Company was
utilizing a higher percentage of larger diameter coiled tubing which is more
expensive to operate than smaller diameter tubing leading to higher coil
charges. Fuel costs as a percentage of revenue, increased due to more of
Leader's equipment travelling to location (with the addition of its fluid
pumpers added to the fleet and support trailers utilized on the deep coil jobs)
and the increase in distance travelled to location in the quarter. During the
quarter, the Company also utilized more nitrogen on a per job basis contributing
to an increase in costs. Variable compensation for field staff was higher as a
percentage of revenue as a result of more personnel on location with the
addition of fluid pumper equipment added to the fleet and due to the
configuration and timing of jobs, combined with a smaller, but more experienced
operations group leading to higher average field rates after personnel were
downsized in November 2012. These cost increases were partially offset by
savings in repair and maintenance due to a higher level of in-house repair
capabilities than in the past, significant savings in third party transportation
costs as compared to 2012 and overall lower fixed operating costs due to lower
personnel levels albeit at higher average compensation rates. Further cost
saving initiatives including the reduction of non-key personnel, were
implemented to coincide with spring break-up.


For the three months ended March 31, 2013, the Company reported a net loss of
$0.8 million ($0.03 per basic and diluted share) compared to $0.9 million in
income ($0.05 per basic share and $0.04 per diluted share) for the three months
ended March 31, 2012. Excluding the loss on settlement of loans and borrowings
of $0.2 million and the $0.7 million in credit facility refinancing costs
expensed in the current period, the Company reported income of $0.1 million in
the first quarter of 2013.


Credit Facility Refinancing

In March 2013, the Company finalized a credit facility with a private Canadian
asset-based lender (the "Asset-Based Credit Facility"). Proceeds from this
facility were used to retire its previous credit facility with a Canadian
chartered bank and provide funding for working capital purposes. The Asset-Based
Credit Facility includes a demand revolving facility of up to $4.0 million and a
demand non-revolving term loan of $12 million that the Company had fully drawn
in March 2013. The initial term of the credit facility is for a period of 12
months at an interest rate of 18% per annum payable monthly with an option to
extend for an additional six month period. 


Outlook

Second quarter revenues are expected to meet or exceed that of the comparative
period of 2012. April revenue has shown an improvement over the same period of
2012 and weather conditions have thus far been conducive for ground conditions
to dry up quickly. Although general market conditions are anticipated to remain
moderately challenging for the remainder of 2013, the Company expects activity
levels to be busier than 2012. The Petroleum Services Association of Canada is
forecasting 12,000 wells to be drilled in 2013, an increase of about 9 per cent
over 2012. Should commodity prices stay at or above current levels, equipment
utilization rates are expected to increase. Additionally, the Company has
continued to establish formal relationships with larger producers, which in
combination with stable commodity prices should lead to improved operations in
2013.


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 2,668,000 unexercised
stock options and 4,400,000 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.


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