Leader Energy Services Reports Third Quarter 2013 Results

Leader Energy Services Ltd. (TSX VENTURE:LEA) ("Leader" or the "Company") has
released its financial and operating results for the three and nine month
periods ended September 30, 2013.




Performance Summary
(000's) (unaudited)

                                   ----------  ----------------------------
                                     Sept. 30, Sept. 30,        $         %
Quarter ended                            2013      2012    Change    Change
                                   ----------  ----------------------------
                                                                           
Revenue                                $5,260    $7,436   $(2,176)     (29)%
Operating Expenses                      4,022     5,113    (1,091)     (21)%
                                   ----------  ----------------------------
                                        1,238     2,323    (1,085)     (47)%
General and Administrative              1,066       983        83        8%
Amortization                            1,007       805       202       25%
Finance cost                              895       416       479      115%
Other losses (gains)                       18        11         7       64%
                                   ----------  ----------------------------
Net loss                              $(1,748)     $108   $(1,856)      n/a
                                   ----------  ----------------------------
Loss per share - Basic                 $(0.06)    $0.00    $(0.06)      n/a
Loss per share - Diluted               $(0.06)    $0.00    $(0.06)      n/a
                                                                           
EBITDA(i)                                $196    $1,381   $(1,185)     (86)%
                                   ----------  ----------------------------
                                                                           
                                   ----------  ----------------------------
                                     Sept. 30, Sept. 30,        $         %
9 months ended                           2013      2012    Change    Change
                                   ----------  ----------------------------
                                                                           
Revenue                               $16,200   $20,838   $(4,638)     (22)%
Operating Expenses                     12,778    16,006    (3,228)     (20)%
                                   ----------  ----------------------------
                                        3,422     4,832    (1,410)     (29)%
General and Administrative              3,066     3,376      (310)      (9)%
Amortization                            3,000     2,343       657       28%
Finance cost                            2,914     1,905     1,009       53%
Loss on settlement of loans and                                            
 borrowings                               233     1,338    (1,105)     (83)%
Other losses (gains)                       78       (66)      144       n/a
                                   ----------  ----------------------------
Net loss                              $(5,869)  $(4,064)  $(1,805)      n/a
                                   ----------  ----------------------------
Loss per share - Basic                 $(0.20)   $(0.15)   $(0.05)      n/a
Loss per share - Diluted               $(0.20)   $(0.15)   $(0.05)      n/a
                                                                           
EBITDA(i)                                $439    $1,549   $(1,110)     (72)%
                                   ----------  ----------------------------

(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.



Revenue in the third quarter was $5.3 million as compared to $7.4 million in the
third quarter of the prior year. Activity levels in the third quarter were
slower to recover from spring break-up as industry activity was hampered by the
June flood in Alberta and wet weather at various times throughout the summer
months. In the current quarter, the Company was involved in a significant
increase in stand-alone nitrogen work as compared to the third quarter of 2012.
The increase is due to customers utilizing nitrogen for gas lift activities. As
a result, the Company used over 15% more nitrogen in the current quarter. This
increase in stand-alone nitrogen work was offset by a reduction in full service
coiled tubing activity in the third quarter of 2013 versus the same quarter in
2012. The reduction in full service coiled tubing activity is due to the wet
weather experienced in the quarter creating a bottle-neck in services as
customers could not access locations with equipment to complete drilling and
fracturing activities prior to the Company's services being needed on location.
Overall, lower activity in the third quarter continued to put pressure on
pricing for the Company's services.


Operating costs in the third quarter of 2013 totaled $4.0 million as compared to
$5.1 million for the third quarter of 2012. During the third quarter, the
Company experienced a 4.4% increase in variable costs as a percentage of revenue
mainly the result of an increase in nitrogen used on stand-alone nitrogen work
and higher costs as a percentage of revenue for routine repair and maintenance,
partially offset by savings realized in lower coiled tubing charges, lower third
party charges, and lower field related subsistence charges. To help ensure
reliability of the Company's equipment, routine repair and maintenance continued
in the third quarter particularly on the nitrogen pumpers where maintenance was
performed between jobs. In addition, the difficulty of moving equipment on and
off location resulting from the wet weather increased the wear and tear on
equipment. These increases were partially offset by savings in personnel
charges. As part of the cost cutting initiatives undertaken in November 2012 and
again in April 2013 to coincide with spring break-up, the Company started the
third quarter of 2013 with a smaller, but more experienced operations group as
compared to the third quarter of 2012. Due to the expected increase in activity
in the winter drilling season; the Company is in the process of adding
personnel. Over the past few years, the biggest challenge facing the Company has
been the ability to hire enough qualified personnel to operate the equipment in
the field. As in the past, the Company is adding personnel from both within and
outside western Canada.


For the three months ended September 30, 2013, the Company reported a net loss
of $1.7 million ($0.06 per basic and diluted share) compared to income of $0.1
million ($0.00 per basic share and diluted share) for the three months ended
September 30, 2012.


For the nine month period ended September 30, 2013, the Company reported
revenues of $16.2 million as compared to $20.8 million reported in the nine
month period of 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 year-to-date 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 quarter.


For the nine month period ended September 30, 2013, the Company reported
operating costs of $12.8 million as compared to $16.0 million for the nine month
period ended September 30, 2012. In the current period, the Company experienced
a slight decrease in variable costs as a percentage of revenue as compared to
the same period in 2012. Savings in repair and maintenance and third party
equipment rentals and transportation charges, 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 particularly in the third quarter accounted for the decrease in
variable costs. As a result of cost reduction initiatives implemented in late
2012 and to coincide with spring break-up, the Company also saved almost $1.0
million in operational wages in the first nine months of 2013.


For the nine months ended September 30, 2013, the Company reported a net loss of
$5.9 million ($0.20 per basic and diluted share) compared to a net loss of $4.1
million ($0.15 per basic share and diluted share) for the nine months ended
September 30, 2012.


Outlook

Leader expects demand for all its services to remain strong through the winter
season and to strengthen over the long term. Although the market remains very
competitive, fourth quarter revenue has to date shown a substantial increase
relative to the same period last year. The Company has been adding to the number
of field personnel over the past few weeks, complementing the highly-experienced
team already in place. With strong oil prices, the development of liquids rich
gas plays, and the prospect of LNG export capabilities to the west coast,
optimism has improved. Effective management of corporate and operating costs
remains a focus.


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 2,568,000 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.


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]