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Best Energy Services Reports Financial Results for Second Fiscal Quarter 2008

Posted on: Tuesday, 30 September 2008, 09:00 CDT

HOUSTON, Sept. 30 /PRNewswire-FirstCall/ -- Best Energy Services, Inc. (BULLETIN BOARD: BEYS) , a U.S. energy production equipment and services provider, today announced its financial performance for the second fiscal quarter, ended July 31, 2008, including the results (and pro forma results) for subsidiaries Bob Beeman Drilling Company and Best Well Service, Inc., which were both acquired on February 14, 2008, and results for American Rig Housing, the assets of which the Company acquired on February 27, 2008. In view of the timing of these acquisitions, no meaningful comparison can be made to the comparable three and six month reporting periods in fiscal 2007.

Financial Highlights for the six months ended July 31, 2008: -- Total revenues were $10.7 million. o Well service revenue (Best Well Service) totaled $8.5 million. o Drilling service revenue (Beeman Drilling) was $1.8 million. o Portable rig housing revenue (American Rig Housing) was $0.4 million. -- Earnings before interest, taxes, depreciation and amortization were $0.3 million. -- Net loss was $4.5 million, after deducting these non-cash or non-recurring costs: o Depreciation of $1.6 million; o Amortization of $2.5 million in non-cash stock costs related to a Cash Collateral Agreement that was necessary in order to fund the acquisitions; o Accrued but unpaid deferred executive compensation of $0.9 million; o Non-cash stock-based compensation of $0.2 million; o Amortization of deferred financing costs of $0.1 million; and o Non-recurring cash costs of $0.4 million attributable largely to the completion of the Best Well and Beeman acquisitions and asset purchase of American Rig Housing. -- Net loss attributable to common shareholders, after accounting for a preferred dividend of $467,000, was approximately $5.0 million, or $0.27 per basic and diluted share. -- Excluding the non-recurring and non-cash expenses, the Company realized cash flow of $1.2 million after interest payments. -- As of July 31, 2008, the Company had $3.6 million in cash and accounts receivable, working capital of $1.1 million and total shareholders' equity of $11.9 million. Financial Highlights for the three months ended July 31, 2008: -- Total revenues were $6.43 million. o Well service revenue (Best Well Service) totaled $4.63 million. o Drilling service revenue (Beeman Drilling) was $1.54 million. o Portable rig housing revenue (American Rig Housing) was $0.26 million. -- Earnings before interest, taxes, depreciation and amortization were $1.13 million. -- Net loss was $128,000, after deducting these non-cash costs: o Depreciation expense of $892,000; o Non-cash stock-based compensation of $45,000; and o Amortization of deferred financing costs of $44,000. -- Net loss attributable to common shareholders, after accounting for the preferred dividend totaled $595,000, or $.03 per basic and common share. -- Excluding the non-cash expenses, the Company realized over $850,000 in cash flow after interest payments.

The following unaudited consolidated pro forma results reflect the pro forma effects of the acquisitions of Bob Beeman Drilling and Best Well Service as if the acquisitions occurred at the beginning of the first fiscal quarter reporting period.

Highlights of Unaudited Consolidated Pro Forma Results for February 1, 2008 through July 31, 2008 (excludes American Rig Housing revenue contribution for the period February 1, 2008 through February 27, 2008), compared to the same six month period in 2007:

-- Revenues totaled $11.5 million, an increase of 21% over $9.5 million. -- Net loss from operations of $0.9 million, a 53% improvement over a net loss from operations of $1.9 million. -- Net loss declined 23% to $4.0 million, or $0.20 loss per basic and diluted share, from $5.2 million, or $.26 loss per basic and diluted share. -- Excluding the non-recurring or non-cash expenses noted above, the Company would have realized cash flow of $1.9 million after interest payments.

In August, Best Energy reported that it had begun redeployment of underutilized drilling rigs acquired in the Beeman transaction. More specifically, the Company noted that it relocated one drilling rig from Moab, Utah to Liberal, Kansas to support contract drilling demand from oil and gas field operators in Kansas, North Texas, Western Oklahoma and Western Nebraska. A second rig was relocated from Moab to Liberal and has been undergoing minor refurbishment and reconfiguration before being deployed in service of drilling contracts in the same region. A third drilling rig is expected to arrive in Kansas from Utah in the third quarter and will be placed in contracted service prior to the end of this year. A fourth rig, the Company's "rat hole" drilling rig, has been moved to northeast Texas where it is being refurbished for deployment in the hyperactive Haynesville shale area of northwest Louisiana. In addition, Beeman's two smallest rigs will be redeployed to east Texas in October or November and put to work as workover rigs. Also, the Company continues to pursue opportunities to deploy two other rigs into a multi-well coalbed methane play before yearend.

"We continue to be very pleased with the measurable financial and operational progress we are achieving as reflected by our accelerating revenue growth and strengthening cash flow," stated Larry Hargrave, Chairman and Chief Executive Officer of Best Energy. "With total annualized revenues currently tracking at approximately $27 million, up from $23 million in 2007, and additional revenue contribution expected from the redeployed Beeman rigs commencing in the third quarter, Best is on pace to accomplish our stated financial goal to achieve a run rate of $35 million in revenues and $10 million in EBITDA by the end of December."

Continuing, he noted, "Demand for our well service operations continues to be very robust, maintaining utilization rates of 100%. When we acquired Beeman Drilling in February, rig utilization stood at 3%. Since that time, we've improved utilization month over month, rising to 30% in July. American Rig Housing (ARH) has also enjoyed a material increase in utilization, improving from 15% in February to 28% in July. Collectively, and notwithstanding any unforeseen setbacks, we believe that this upward trend at Beeman and ARH will persist through the next several quarters."

"I'm also happy to confirm that our business operations based in and around Houston were relatively unaffected by Hurricane Ike. Aside from suspending operations in Houston during the actual storm and suffering from inconvenient power outages that affected our offices and employees' homes, we successfully withstood the storm and are now returning to business as usual," added Hargrave.

Due to storm recovery efforts that affected the Best team, management has elected to forego hosting a conference call to discuss its second fiscal quarter results. However, the Company will resume its practice of hosting quarterly shareholder calls following the release of its third fiscal quarter results, which is expected to occur on or before December 15, 2008. To view in-depth information regarding these results, please refer to the related Forms 10-Q filed with the U.S. Securities and Exchange Commission on Monday, September 22, 2008. You can access this and other informative Company filings via the Internet by visiting http://www.sec.gov/ or http://www.beysinc.com/. Questions regarding the results may be directed to Best Energy by way of its web site at http://www.beysinc.com/ or by contacting Elite Financial Communications Group at 407-585-1080 or via email at BEYS@efcg.net.

About Best Energy Services, Inc.

Based in Houston, Texas, Best Energy Services, Inc. is a leading well service, drilling and ancillary services provider to the domestic oil, gas, water and mining industries. Through its subsidiaries, Best Well Service, Inc. and Bob Beeman Drilling Co., and its American Rig Housing operations, the Company is actively engaged in supporting the exploration, production and/or recovery of oil, gas, water and mineral resources in Arizona, Colorado, Kansas, New Mexico, Nevada, Oklahoma, Texas and Utah. For more information, please visit http://www.beysinc.com/.

Certain statements contained in this press release, which are not based on historical facts, are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995, and are subject to substantial uncertainties and risks in part detailed in the respective Company's Securities and Exchange Commission filings, that may cause actual results to materially differ from projections. Although the Company believes that its expectations are reasonable assumptions within the bounds of its knowledge of its businesses, expectations, representations and operations, there can be no assurance that actual results will not differ materially from their expectations. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the Company's ability to execute properly its business model, to raise additional capital to implement its continuing business model, the ability to attract and retain personnel - including highly qualified executives, management and operational personnel, ability to negotiate favorable current debt and future capital raises, and the inherent risk associated with a diversified business to achieve and maintain positive cash flow and net profitability. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this press release will, in fact, occur.

FOR MORE INFORMATION, PLEASE CONTACT Best Energy Services, Inc. Jim Carroll, Chief Financial Officer 713-933-2600 or Elite Financial Communications Group/Elite Media Group Dodi B. Handy, President and CEO 407-585-1080 or via email at BEYS@efcg.net

Best Energy Services, Inc.

CONTACT: Jim Carroll, Chief Financial Officer of Best Energy Services,Inc., +1-713-933-2600; or Dodi B. Handy, President and CEO of Elite FinancialCommunications Group|Elite Media Group, +1-407-585-1080, BEYS@efcg.net

Web site: http://www.beysinc.com/

Source: PRNewswire-FirstCall

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