<<

>>

ALICE, Texas, Aug. 14, /CNW/ -- Forbes Energy Services Ltd. (TSX: FRB)

today announced financial and operating results for the second quarter ended

June 30, 2009.

Revenues for the second quarter declined to $49.8 million compared to

$63.4 million in the first quarter of 2009 as a result of lower pricing and

utilization in both operating segments. Net loss for the three months ended

June 30, 2009 was $9.0 million, or a loss of $0.15 per share, compared to a

net loss of $4.5 million, or $0.07 per share, in the quarter ended March 31,

2009. Adjusted EBITDA for the second quarter of 2009 totaled $3.3 million

versus $9.7 million in the 2009 first quarter. Adjusted EBITDA is a non-GAAP

financial measure, defined by the Company as net income before interest,

taxes, depreciation, amortization and non-cash stock based compensation. For

a reconciliation of Adjusted EBITDA to net income, please see the disclosures

at the end of this release and on the Company's website.

John Crisp, Forbes Energy's President and Chief Executive Officer,

stated, "Activity in the second quarter was largely consistent with what we

experienced at the end of the first quarter. In the well servicing segment,

utilization appears to have bottomed in April, and pricing has also

leveled-out. Pricing and utilization have continued to trend downward in the

fluid logistics segment, although that business now appears to be in the

process of leveling out.

"Mexico continues to be a positive for the Company as we now have nine

rigs working or en route. Additionally, we're in the process of setting up

shop in the Marcellus Shale which has the potential to be a key driver of our

long-term growth. The Marcellus is one of the few plays in the United States

where activity continues to accelerate in spite of the depressed natural gas

environment."

<<

Business Segment Results

Well Servicing

>>

Well servicing revenues decreased to $25.5 million during the second

quarter of 2009 compared to $31.5 million in the first quarter. Well

servicing segment gross margins in the second quarter of 2009 were $1.8

million, compared to $5.1 million in the first quarter of 2009.

Forbes recorded approximately 65,453 rig hours for the second quarter of

2009, including 10,440 hours in Mexico, compared to 73,522 total hours in the

first quarter of 2009 (4,748 in Mexico). The Company had 170 rigs in its well

service fleet at June 30, 2009, unchanged from March 31, 2009. Capital

expenditures for the well servicing segment totaled $3.4 million during the

three months ended June 30, 2009, primarily related to Mexico.

<<

Fluid Logistics

>>

Fluid logistics revenues in the second quarter of 2009 decreased to $24.2

million compared to $31.9 million in the first quarter of 2009. Gross margins

for the fluid logistics segment totaled $4.3 million compared to $8.7 million

in the previous quarter.

Forbes recorded 199,662 truck hours during the second quarter of 2009

compared to 229,219 for the first quarter. The Company's fluid transport

segment heavy truck fleet totaled 370 as of June 30, 2009, unchanged from

March 31, 2009. Total capital expenditures for the fluid logistics segment

were $0.3 million for the three months ended June 30, 2009.

<<

Conference Call

>>

Forbes Energy will host a conference call to discuss its second quarter

2009 results on Monday, August 17, 2009, at 10:00 a.m. Eastern Time (9:00 a.m.

Central). To access the call, please dial (480) 629-9773 and ask for the

"Forbes Energy Services" call at least 10 minutes prior to the start time. The

conference call will also be broadcast live via the Internet and can be

accessed through the "Investor Relations" page of Forbes Energy's website,

www.forbesenergyservices.com.

A telephonic replay of the conference call will be available until August

24, 2009, and may be accessed by calling (303) 590-3030 and using the pass

code 4139793. A webcast archive will be available at

www.forbesenergyservices.com shortly after the call and will be accessible for

approximately 30 days. For more information, please contact Donna Washburn at

DRG&E at (713) 529-6600 or email at dmw@drg-e.com.

<<

About Forbes Energy

>>

Forbes Energy Services Ltd. is an independent oilfield services

contractor that provides a broad range of drilling-related and

production-related services to oil and natural gas companies, primarily

onshore in Texas, Mississippi, and Mexico.

<<

Forward-Looking Statements and Regulation G Reconciliation

>>

This press release contains "forward-looking statements," as contemplated

by the Private Securities Litigation Reform Act of 1995, in which the Company

discusses factors it believes may affect its performance in the future. The

accuracy of the Company's assumptions, expectations, beliefs and projections

depend on events or conditions that change over time and are thus susceptible

to change based on actual experience, new developments and known and unknown

risks. The Company gives no assurance that the forward-looking statements will

prove to be correct and does not undertake any duty to update them. The

Company's actual future results might differ from the forward-looking

statements made in this press release for a variety of reasons, which include:

supply and demand for oilfield services and the level of oil and natural gas

prices; the continued uncertainty in the global financial markets and its

effect on domestic spending in the oil and natural gas industry; the Company's

ability to maintain pricing on its core services; the potential for excess

capacity in the industry; and competition. Should one or more of the foregoing

risks or uncertainties materialize, or should the Company's underlying

assumptions prove incorrect, the Company's actual results may vary materially

from those anticipated in its forward-looking statements, and the Company's

business, financial condition and results of operations could be materially

and adversely affected. Additional factors that you should consider are set

forth in detail in the Risk Factors section of the Company's Annual Report on

Form 10-K for the year ended December 31, 2008 (the "Form 10-K") as well as

other filings the Company has made with the Securities and Exchange

Commission.

Forbes Energy's financial statements and management's discussion and

analysis of financial condition and results of operations can be found in the

Form 10-Q, which is being filed with the Securities and Exchange Commission

and posted on the Company's website.

This press release also contains references to the non-GAAP financial

measure of earnings, or net income, before interest, income taxes,

depreciation and amortization, or EBITDA. For a reconciliation of EBITDA to

net income, please see the table at the end of this release. Management's

opinion regarding the usefulness of EBITDA to investors and a description of

the ways in which management uses such measures can be found on the "Investor

Relations" page of Forbes Energy's website, www.forbesenergyservices.com.

<<

Contacts: Forbes Energy Services Ltd.

L. Melvin Cooper, SVP & CFO

361-664-0549

>>

<<

DRG&E

Ken Dennard, Managing Partner

Ben Burnham, AVP

713-529-6600

>>

-Tables to Follow-

<<

Selected Statement of Operations Data

(Unaudited)

>>

<<

Three Months Ended Six Months Ended

June 30, June 30,

------------------ ------------------

2009 2008 2009 2008

---- ---- ---- ----

(As (As

Restated) Restated)

Revenues

Well servicing $25,515,071 $47,376,065 $57,054,079 $86,660,403

Fluid logistics 24,237,506 41,225,126 56,129,880 72,463,647

---------- ---------- ---------- ----------

Total

revenues 49,752,577 88,601,191 113,183,959 159,124,050

---------- ---------- ----------- -----------

>>

<<

Expenses

Well servicing 23,720,892 30,008,033 50,116,601 54,412,815

Fluid logistics 19,928,066 28,164,067 43,159,687 50,458,950

General and

administrative 3,896,576 4,717,627 9,670,455 7,860,308

Depreciation and

amortization 9,774,963 7,431,081 19,466,335 14,471,104

--------- --------- ---------- ----------

Total

expenses 57,320,497 70,320,808 122,413,078 127,203,177

---------- ---------- ----------- -----------

Operating

income (loss) (7,567,920) 18,280,383 (9,229,119) 31,920,873

>>

<<

Other income

(expense)

Interest expense (6,406,311) (6,584,009) (13,059,988) (12,559,135)

Gain on

extinguishment

of debt 447,842 - 1,421,750 -

Other income

(expense) 8,084 77,034 34,617 106,568

----- ------ ------ -------

Income

(loss)

before

taxes (13,518,305) 11,773,408 (20,832,740) 19,468,306

>>

<<

Income tax

expense

(benefit) (4,480,569) 54,985,420 (7,259,514) 55,157,420

---------- ---------- ---------- ----------

Net

income

(loss) $(9,037,736) $(43,212,012) $(13,573,226) $(35,689,114)

=========== ============ ============ ============

>>

<<

Earnings (loss)

per share of

common stock

Basic $(0.15) $(1.13) $(0.22) $(1.05)

Diluted $(0.15) $(1.13) $(0.22) $(1.05)

>>

<<

Weighted average

number of

shares

outstanding

Basic 62,111,200 38,166,398 62,111,200 33,833,299

Diluted 62,111,200 38,166,398 62,111,200 33,833,299

>>

<<

Pro forma

earnings per

share(1)

Basic $0.14 $0.23

Diluted $0.13 0.22

>>

<<

Weighted average

number of

shares

outstanding

Basic 54,144,700 54,144,700

Diluted 56,914,700 56,914,700

>>

<<

(1) The pro forma earnings per share reflects the effects related to the

Company's Bermuda reorganization from a limited liability company to

a "C" corporation, this issuance of common stock in connection with

Forbes' initial equity offering and an assumed effective tax rate

of 37%. See disclosures in the Company's 10-Q filing for additional

information.

>>

<<

Selected Balance Sheet Data

(Unaudited)

June 30, December 31,

2009 2008

---- ----

Cash $38,563,078 $23,469,067

Accounts receivable 41,672,837 69,095,522

Working Capital 36,517,871 42,707,044

Intangible assets (net) 38,029,379 39,459,977

Total assets 457,172,423 482,801,391

Total debt 216,596,051 212,189,842

Deferred tax liability 54,676,072 62,068,620

Shareholders'/members' equity 146,088,122 158,418,487

>>

Selected Operating Data

<<

Three Months Ended Six Months Ended

June 30, June 30,

------------------ ------------------

2009 2008 2009 2008

---- ---- ---- ----

Working days 64 64 127 128

Rig Hours

U.S. 55,013 97,860 123,787 173,549

Mexico 10,440 - 15,188 -

------ --- ------ ---

Total rig hours 65,453 97,860 138,975 173,549

>>

Truck hours 199,662 271,968 428,881 492,823

<<

Reconciliation of Adjusted EBITDA to Net Income

(Unaudited)

>>

<<

Three Months Ended

------------------

June 30, 2009 June 30, 2008 March 31, 2009

------------- ------------- --------------

(As Restated)

Net Income (loss) $(9,037,736) $(43,212,012) $(4,535,490)

Depreciation and

amortization 9,774,963 7,431,081 9,691,372

Interest expense 6,406,311 6,584,009 6,653,677

Income tax expense

(benefit) (4,480,569) 54,985,420 (2,778,945)

Stock based

compensation 622,419 - 624,736

------- --- -------

Adjusted EBITDA $3,285,388 $25,788,498 $9,655,350

========== =========== ==========

>>

<<

Six Months Ended June 30,

-------------------------

2009 2008

----------- -----------

(As Restated)

Net Income (loss) $(13,573,226) $(35,689,114)

Depreciation and amortization 19,466,335 14,471,104

Interest expense 13,059,988 12,559,135

Income tax expense (benefit) (7,259,514) 55,157,420

Stock based compensation 1,247,155 203,428

--------- -------

Adjusted EBITDA $12,940,738 $46,701,973

=========== ===========

>>

-30-

/For further information: L. Melvin Cooper, SVP & CFO, Forbes Energy

Services Ltd., +1-361-664-0549; or Ken Dennard, Managing Partner, or Ben

Burnham, AVP, both of DRG&E, +1-713-529-6600, for Forbes Energy Services Ltd.

Web Site: http://www.forbesenergyservices.com/