Leader Energy Services Reports Strong First Quarter 2012 Results

Leader Energy Services Ltd. ("Leader" or the "Company") (TSX VENTURE:LEA) has
released its financial and operating results for the three months ended March
31, 2012. 


Highlights for the Three Months Ended March 31, 2012



--  Revenue from continuing operations increased 9% to $11.1 million for the
    three months ended March 31, 2012, compared with $10.1 million in
    Q1/2011. 
--  EBITDA decreased 22% to $3.1 million, compared with $4.0 million in
    Q1/2011.The early arrival of spring breakup and consequential reliance
    on third party transportation curtailed EBITDA for the first quarter. 
--  Income from continuing operations decreased 27% to $0.9 million ($0.05
    per basic common share), compared with $1.3 million ($0.07 per basic
    common share) in Q1/2011. Excluding a non-cash loss on settlement of
    loans and borrowings, the Company reported a profit of $1.5 million
    ($0.08 per basic common share). 
--  Added a new 2-3/8" deep coiled tubing unit and two new fluid pumpers to
    its fleet of equipment in the latter part of the first quarter. 
--  As of March 31, 2012, the Company has six coiled tubing units plus one
    reel trailer, seven nitrogen pumpers and three fluid pumpers. Three of
    these coiled tubing units and one reel trailer are classified as "deep"
    coil units. 
--  Completed a bought deal equity financing at $0.70 per share for gross
    proceeds of $6.9 million. 
--  Subsequent to quarter-end, the Company repaid $6.1 million of the
    outstanding $15 million balance to the holder of its 12% secured debt
    facility, resulting in a non-cash charge to the consolidated statement
    of comprehensive income of $0.6 million. 
--  The Company expects to invest between $3.5 million and $4.5 million in
    capital equipment in 2012. The Company plans to utilize additional
    operating cash flow to further reduce corporate indebtedness during the
    course of 2012.  

----------------------------------------------------------------------------
Performance Summary                                                         
                                                                            
(000's) (unaudited)                                                         
----------------------------------------------------------------------------
                                        Mar. 31,     Mar. 31,               
Quarter ended                               2012         2011     % Change  
----------------------------------------------------------------------------
                                                                            
 Revenue - continuing operations         $11,072      $10,138            9% 
 Operating Expenses - continuing                                            
  operations                               6,720        5,131           31% 
                                    ----------------------------------------
                                           4,352        5,007          (13)%
 General and Administrative -                                               
  continuing operations                    1,278        1,058           21% 
 Amortization - continuing                                                  
  operations                                 710          589           21% 
 Finance cost                                879          775           13% 
 Loss on settlement of loans and                                            
  borrowings                                 576        1,401          n/a  
 Other gains                                 (28)         (91)         n/a  
                                    ----------------------------------------
 Income - continuing operations              937        1,275          (27)%
                                    ----------------------------------------
 Income (loss) - discontinued                                               
  operations                                   -           16          n/a  
                                    ----------------------------------------
 Net Income                                 $937       $1,291          (27)%
                                    ----------------------------------------
                                    ----------------------------------------
 Earnings per share - Basic                $0.05        $0.07               
 Earnings per share - Diluted              $0.04        $0.05               
                                                                            
 EBITDA(i)                                $3,105       $3,997          (22)%
                                    ----------------------------------------
                                    ----------------------------------------



(i) EBITDA means income from continuing operations before finance costs, loss on
settlement of loans and borrowings, taxes, amortization, other 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.


Overview

Headquartered out of Calgary, Alberta, Leader Energy Services Ltd.'s ("Leader"
or the "Company") operations are managed from its operations base in Grande
Prairie, Alberta. From this base the Company offers well stimulation services
across the Western Canadian Sedimentary Basin ("WCSB"). 


For the first quarter ended March 31, 2012, revenues increased 9% to $11.1
million, a $0.9 million increase compared to the first quarter ended March 31,
2011. The 9% increase in revenue mainly reflects the increase in horizontal
drilling activity resulting in continued demand for deeper and larger diameter
coil applications, which translates to higher day rates. Consistent with 2011,
the Company has continued to focus its service activities to meet the demands of
the growing horizontal drilling market and is providing its services to a larger
area within the WCSB. 


The Company estimates that the late start in January combined with an early
spring break-up resulted in the loss of approximately $1.75 million in revenue.
The early spring break-up had the added effect of increasing costs to transport
equipment to the field. 


In the first quarter of 2012, the Company reported income from continuing
operations of $0.9 million as compared to income from continuing operations of
$1.3 million in 2011. Excluding non-cash losses on settlement of loans and
borrowings, the Company reported income from continuing operations of $1.5
million in the first quarter of 2012 as compared to $2.7 million in the first
quarter of 2011.


On March 27, 2012, the Company completed its bought deal equity financing for
gross proceeds of $6,853,000 representing the issue of 9,790,000 common shares
of the Company at $0.70 per share, including 1,218,000 common shares pursuant to
the partial exercise of an over-allotment option. After deducting underwriter
fees and transaction costs, net proceeds from the equity financing were $6.1
million. On April 4, 2012, the Company paid $6.1 million of the outstanding $15
million balance to the holder of its secured debt facility.


Results of Continuing Operations



----------------------------------------------------------------------------
Well Stimulation                                                            
 Services                                                                   
                                                                            
(000's) (unaudited)                                                         
----------------------------------------------------------------------------
                            March 31,    March 31,                          
Quarter ended                    2012         2011    $ Change    % Change  
----------------------------------------------------------------------------
                                                                            
 Revenue                      $11,072      $10,138        $934           9% 
 Operating Expenses             6,720        5,131       1,589          31% 
                         ---------------------------------------------------
 Gross profit(i)               $4,352       $5,007       $(655)        (13)%



(i) Management believes that gross profit provides investors with an indication
of income 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 IFRS as an indicator of the
Company's performance. 


Revenues from well stimulation services increased to $11.1 million in the first
quarter ended March 31, 2012 as compared to $10.1 million in the first quarter
ended March 31, 2011. This 9% increase in revenue is mainly attributed to the
continued demand for deeper, larger diameter coil equipment applicable to the
horizontal drilling market in north-central Alberta and northeast British
Columbia. This concentration on larger diameter deep coil work focuses on oil
and liquids-rich resource plays, and has resulted in higher day rates being
charged by the Company. These higher revenues were partially offset by an
increase in equipment standby at lower day rates as a result of an industry-wide
shortage of class three 2" and 2 3/8" coiled tubing units. As a result of this
shortage, customers requested equipment stay on location at lower standby rates
in anticipation of further work at these locations, forcing the Company to delay
upcoming jobs and in some circumstances turn down potential projects while this
equipment was deployed. The Company estimates that an additional $0.4 million in
revenue would have been earned had the equipment been operational rather than on
standby. In addition, the late start to activity in January combined with the
early spring break-up, reduced revenue reported in the quarter by an estimated
$1.75 million.


The Company took delivery of its new 2 3/8" deep coiled tubing unit in late
February 2012 and its two new fluid pumpers in February and late March
respectively. This equipment is in very high demand and forms an integral
component of longer-reach coiled tubing applications. As of March 31, 2012, the
Company has six coiled tubing units plus one reel trailer, seven nitrogen
pumpers and three fluid pumpers. Three of these coiled tubing units and one reel
trailer are classified as "deep" coil units.


For the first quarter ended March 31, 2012, the Company reported operating costs
of $6.7 million as compared to $5.1 million in the same quarter in 2011. The
increase in operating expenses in the current quarter is a result of an increase
in field personnel required to operate the new 2 3/8" coiled tubing unit and the
new fluid pumpers, higher compensation charges for field personnel, rental of
equipment in the field, and a continued reliance on third party transportation
of nitrogen. In addition, the early start to spring break-up in March resulted
in the Company renting additional trailers to redistribute weight of its
equipment to ensure that it complied with road ban and published weight
restrictions. These modifications reduce operational efficiency due to an
increase in personnel traveling to location, higher fuel costs due to an
increase in the number of tractors transporting equipment to location, and
varying travel times, resulting in higher daily costs for lodging and field pay
such as day rates and subsistence. In response to the reliance on third party
transportation, the Company has taken delivery of additional equipment in April
2012 to reduce this reliance on a go-forward basis.


Outlook

Spring breakup arrived early this year, curtailing revenue for the first quarter
by approximately 15%. The early breakup, combined with below average snow levels
over the winter could see a return to summer operating conditions sooner than
normal. Leader expects utilization rates for the second half of 2012 to be
similar to 2011 as demand remains strong for the Company's services. The
remainder of equipment built under the 2011 capital program was delivered at the
end of the first quarter of 2012; given a larger equipment fleet and steady
utilization rates, the Company expects an increase in year-over-year revenue.
Leader remains focused on reducing overall debt levels while opportunistically
increasing its capital expenditures to take advantage of growing demand expected
in its three service lines.


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 29,378,021 which does not include 1,643,500 unexercised
stock options and 4,250,000 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.