Ensign Energy Services Inc. Reports Record Revenue and Funds from Operations in 2012

CALGARY, March 18, 2013 /CNW/ –

Overview

Ensign Energy Services Inc. (“Ensign” or the “Company”) generated record
revenue of $2,197.3 million for the year ended December 31, 2012, an
increase of 16 percent over revenue of $1,890.4 million recorded in the
prior year.  Net income for the year ended December 31, 2012 was $217.5
million ($1.42 per common share), a two percent increase from $212.4
million ($1.39 per common share) recorded in 2011.  Operating earnings,
expressed as EBITDA (defined as earnings before interest, income taxes,
depreciation, and share-based compensation expense (recovery)), for
2012 were $554.5 million ($3.63 per common share), a 10 percent
increase from EBITDA of $502.0 million ($3.28 per common share) for the
year ended December 31, 2011.  Funds from operations were also the
highest in the Company’s history, increasing five percent to $500.5
million ($3.28 per common share) from $475.6 million ($3.11 per common
share) in the prior year.

During the fourth quarter of 2012, the Company generated revenue of
$530.1 million, a decrease of eight percent from revenue of $578.0
million recorded in the fourth quarter of 2011.  Net income decreased
eight percent to $48.5 million ($0.32 per common share) compared to
$52.6 million ($0.34 per common share) recorded in 2011.  EBITDA was
$123.3 million ($0.81 per common share) for the fourth quarter of 2012,
a decrease of 21 percent from EBITDA of $155.2 million ($1.02 per
common share) recorded in the fourth quarter of 2011.  Funds from
operations were $117.1 million ($0.77 per common share) for the fourth
quarter of 2012, a 17 percent decrease from $140.5 million ($0.92 per
common share) recorded in the fourth quarter of 2011.

The financial results for the three and twelve months ended December 31,
2012 reflect what was a mixed year overall for the Company’s
operations.  North American oilfield services, particularly in Canada,
experienced a strong start in 2012; however, a slowdown towards the
latter half of the year, as customers reacted to unfavorable price
differentials for Canadian commodities, a continuing over-supply of
natural gas and uncertainty in global economic conditions, weakened
activity levels and financial contributions in the last half of the
year.  The Company’s United States operations recorded an increase to
revenues in 2012 compared to the prior year primarily due to the
positive impact from the first full year of operations from the land
drilling division of Rowan Companies, Inc. (“Rowan Land Drilling”,
subsequently referred to as “Ensign US Southern”) which was acquired in
September 2011.  For the Company’s international operations, higher
activity levels and revenue rates in Latin America and the eastern
hemisphere generated improved financial and operating results for the
three and twelve months ended December 31, 2012.

In 2012 the Company added 13 new Automated Drill Rigs (“ADR^®“) to its drilling rig fleet: six in the Canadian market; five in the
United States market; and two in Australia through the new build
program.  All of the newly constructed ADRs are subject to long-term
contracts.  The new build program also added 12 new well servicing rigs
in the United States.

The Company increased its dividend in 2012 with a 4.8 percent fourth
quarter increase in the quarterly dividend rate to $0.110 per common
share from the previous quarterly dividend rate of $0.105 per common
share.  During the year ended December 31, 2012, the Company declared
dividends of $0.4250 per common share, an increase of nine percent over
dividends of $0.3900 per common share declared in 2011.  The dividend
has been increased at a 17 percent compound annual growth rate since
the Company first paid a dividend in 1995.

The Company issued USD $300.0 million of senior unsecured notes (the
“Notes”) in February 2012.  The proceeds from the issuance of the
Notes, along with an expanded global revolving credit facility (the
“Global Facility”) and funds generated from operations, were used to
repay the USD $400.0 million term loan, incurred to finance the
September 2011 acquisition of Rowan Land Drilling.  The Notes consist
of:  USD $100.0 million in five year notes with an interest rate of
3.43 percent; USD $100.0 million in seven year notes with an interest
rate of 3.97 percent; and USD $100.0 million in ten year notes with an
interest rate of 4.54 percent.  The Company also increased its credit
facilities in 2012 resulting in an increase in available borrowings to
$164.3 million at December 31, 2012 compared to $10.1 million at
December 31, 2011.  Changes to the Company’s capital structure during
2012 provide the Company with a measure of financial stability and
support for future growth opportunities.

FINANCIAL AND OPERATING HIGHLIGHTS

¹ EBITDA is defined as “income before interest, income taxes, depreciation
and share-based compensation expense (recovery)”.  Management believes
that in addition to net income, EBITDA and EBITDA per share are useful
supplemental measures as they provide an indication of the results
generated by the Company’s principal business activities prior to
consideration of how these activities are financed, how the results are
taxed in various jurisdictions or how the results are impacted by the
accounting standards associated with the Company’s share-based
compensation plans.  EBITDA and EBITDA per share as defined above are
not recognized measures under International Financial Reporting
Standards and accordingly may not be comparable to measures used by
other companies.

² Adjusted net income is defined as “net income before share-based
compensation expense (recovery), tax-effected using an income tax rate
of 35 percent”.  Adjusted net income and Adjusted net income per share
are useful supplemental measures as they provide an indication of the
results generated by the Company’s principal business activities prior
to consideration of how the results are impacted by the accounting
standards associated with the Company’s share-based compensation plans,
net of income taxes.  Adjusted net income and Adjusted net income per
share as defined above are not recognized measures under International
Financial Reporting Standards and accordingly may not be comparable to
measures used by other companies.

³ Funds from operations is defined as “cash provided by operating
activities before the change in non-cash working capital”.  Funds from
operations and Funds from operations per share are measures that
provide additional information regarding the Company’s liquidity and
its ability to generate funds to finance its operations.  Management
utilizes these measures to assess the Company’s ability to finance
operating activities and capital expenditures.  Funds from operations
and Funds from operations per share are not measures that have any
standardized meaning prescribed by International Financial Reporting
Standards and accordingly may not be comparable to similar measures
used by other companies.

⁴ Excludes coring rigs.

⁵ Includes workover rigs.

2012 Highlights

• Revenue for 2012 was at record levels, reaching $2,197.3 million, up 16
  percent from 2011.
• 13 new ADRs were added to the Company’s drilling fleet: six in the
  Canadian market; five in the United States market; and two in Australia
  through the new build program.  The new build program also added 12 new
  well servicing rigs in the United States.
• For the first time in the Company’s history, United States oilfield
  services generated the largest contribution to consolidated revenues in
  2012, representing 43 percent of total revenue.
• EBITDA for 2012 was $554.5 million, a ten percent increase from EBITDA
  of $502.0 million for the year ended December 31, 2011.  Funds from
  Operations were the highest in the Company’s history, increasing five
  percent to $500.5 million from $475.6 million in the prior year.
• The Company issued USD $300.0 million of senior unsecured notes (the
  “Notes”) in February 2012.  The proceeds from the issuance of the
  Notes, along with expanded credit facilities and funds generated from
  operations, were used to repay the USD $400.0 million term loan,
  incurred to finance the September 2011 acquisition of Rowan Land
  Drilling.  The Company also increased its credit facilities in 2012
  resulting in an increase in available borrowings to $164.3 million as
  of December 31, 2012 compared to $10.1 million at December 31, 2011.
• The Company declared a quarterly cash dividend on common shares of
  $0.110 per common share payable April 5, 2013.  In 2012 the Company
  declared dividends of $0.4250 per common share, an increase of nine
  percent over dividends of $0.3900 per common share declared in 2011. 
  The Company has increased its dividend every year since the first
  dividend was paid in 1995.
• Canadian drilling operating days totaled 18,398 in 2012, a 19 percent
  decrease from 22,750 operating days in the previous year.  Canadian
  well servicing hours decreased by three percent in the year ended
  December 31, 2012 from the prior year.
• United States drilling operating days totaled 24,226 in 2012, a 16
  percent increase from 20,827 operating days in 2011.  United States
  well servicing hours increased by 48 percent in 2012 compared with
  2011.
• International drilling operating days totaled 11,612 in 2012, an eight
  percent increase from 10,748 operating days recorded in 2011.

Revenue and Oilfield Services Expense

The Company generated the highest revenue in its history for the year
ended December 31, 2012, totaling $2,197.3 million, an increase of 16
percent over $1,890.4 million for the year ended December 31, 2011. 
Revenue recorded in the fourth quarter of 2012 totaled $530.1 million,
a decrease of eight percent from $578.0 million recorded in the fourth
quarter of 2011.  Growth in the Company’s operations, particularly in
the United States through the 2011 acquisition of Rowan Land Drilling,
as well as additions to the Company’s global fleet through an active
new build program led to increased revenues in 2012 compared to the
prior year.  The acquisition of Rowan Land Drilling added 30 drilling
rigs to the Company’s United States operations; and the new build
program added 13 new ADR^® drilling rigs: six in Canada, five in the United States and two in
Australia throughout 2012.  Positive contributions from the
aforementioned growth of the Company’s operations were dampened by
reduced demand for North American oilfield services, particularly in
Canada, in the latter half of the year as customers reacted to volatile
commodity prices and the general uncertainty of global economic
conditions.

Gross margin as a percentage of revenue was similar to the prior year
decreasing only slightly to 29.2 percent from 30.0 percent in 2011. 
Gross margin as a percentage of revenue for the fourth quarter of 2012
decreased to 27.5 percent compared to 28.9 percent for the fourth
quarter of the prior year.  With the softening of demand for North
American oilfield services, certain equipment classes experienced
reduced revenue rates when compared to the prior year; however, revenue
rates in the Company’s international operations were higher in 2012
compared to 2011 as certain areas experienced improved levels of demand
for oilfield services.  Expenditures for major maintenance were higher
for the year ended December 31, 2012 compared to the year ended
December 31, 2011, negatively impacting margins as these costs are
generally expensed as incurred.  Higher spending on major maintenance
in the current year compared to the prior year resulted primarily from
the increased activity levels in the first half of 2012 compared to
2011.  The reduction in gross margin in the fourth quarter of 2012
compared to the same period in 2011 was due in part to higher direct
costs associated with ongoing maintenance programs and slightly lower
margins for certain equipment classes.

Canadian Oilfield Services

¹ Excludes coring rigs.

² Includes transfers to coring rigs.

The Company recorded revenue of $774.4 million in Canada for the year
ended December 31, 2012, a one percent decrease from $786.2 million
recorded in the year ended December 31, 2011.  Revenue generated in
Canada decreased 22 percent to $176.7 million for the three months
ended December 31, 2012, from $225.2 million for the three months ended
December 31, 2011.  In the fourth quarter of 2012, Canadian revenues
accounted for 33 percent of total revenue (2011 – 39 percent), and
during the year ended December 31, 2012, Canadian revenues were 35
percent of total revenue (2011 – 42 percent).

The Company’s Canadian operations saw a strong start to 2012 as
increased levels of demand and improved pricing for Canadian oilfield
services that began in 2011 continued into the current year. However,
as the year progressed, the Company’s customers reacted to reduced
levels of cash flows from natural gas and crude oil production, and a
softening in demand for oilfield services occurred, negatively
impacting operating and financial results for the year.

During the year ended December 31, 2012, operating days recorded by the
Company’s Canadian operations decreased 19 percent compared to the
level of activity in the prior year.  Operating days in the fourth
quarter of 2012 decreased 31 percent from the comparable quarter in the
prior year.  Similarly, Canadian well servicing hours decreased by
three percent in the year ended December 31, 2012 and by nine percent
in the fourth quarter of 2012 compared to the corresponding periods in
the prior year.

The Company decommissioned or disposed of three inactive drilling rigs
and four inactive well servicing rigs during 2012 and transferred nine
drilling rigs to the oil sands coring fleet and one drilling rig to the
Australian market.  Six new build ADRs were added to the Company’s
Canadian equipment fleet in 2012.  Subsequent to December 31, 2012, the
Company disposed of its manufacturing facility located in Calgary,
Alberta.

United States Oilfield Services

The Company’s United States operations recorded revenue of $944.6
million during the year ended December 31, 2012, an increase of 30
percent from the $727.7 million recorded in the year ended December 31,
2011.  Revenue recorded in the United States was $213.7 million in the
fourth quarter of 2012, a 10 percent decrease from the $236.8 million
recorded in the corresponding period of the prior year.  The United
States segment accounted for 40 percent of the Company’s revenue in the
fourth quarter of 2012 (2011 – 41 percent); and 43 percent of the
Company’s revenue in the current year (2011 – 38 percent) making it the
largest contributor to consolidated revenue in 2012.

The number of operating days recorded by the Company’s United States
operations for the year ended December 31, 2012 increased 16 percent to
24,226 operating days from 20,827 operating days in 2011.  During the
fourth quarter of 2012 the Company recorded 5,555 operating days in the
United States, a decrease of 17 percent over 6,671 operating days
recorded during the fourth quarter of the prior year.  United States
well servicing hours in the fourth quarter of 2012 were up 10 percent
compared to the prior year and well servicing hours for 2012 were up 48
percent compared to 2011 due to expansions in the Company’s United
States well servicing rig fleet.

The Company’s presence in the United States oilfield services market
continued to grow in 2012 through the addition of five new ADR^® drilling rigs and 12 new well servicing rigs constructed under the
Company’s ongoing new build program.  These equipment additions,
combined with the positive impact from a full year of contribution from
Ensign US Southern, strengthened operating and financial results in
2012 compared to 2011.

The Company transferred six drilling rigs to the United States equipment
fleet from the Company’s operations in Mexico late in 2012.  Other
changes to the Company’s United States equipment fleet during 2012
included the decommissioning or disposal of six inactive drilling rigs
and two inactive well servicing rigs; and the transfer of one drilling
rig to the international segment.

Operating results for the United States segment were further improved on
translation to Canadian dollars by the strengthening of the United
States dollar through 2012 compared to the prior year. The average
exchange rate for the year increased one percent during the twelve
months ended December 31, 2012 to 1.00, compared to an average of 0.99
during the prior year.

International Oilfield Services

The Company’s international operations recorded revenue of $478.3
million for the year ended December 31, 2012, a 27 percent increase
from revenue of $376.5 million in 2011.  International revenue totaled
$139.7 million in the fourth quarter of 2012, a 20 percent increase
from $116.0 million recorded in the corresponding period of the prior
year.  International operations contributed 27 percent of the Company’s
revenue in the fourth quarter of 2012 (2011 – 20 percent) and 22
percent in the year ended December 31, 2012 (2011 – 20 percent).

The Company’s international operations recorded 11,612 operating days in
2012, an eight percent increase from 10,748 operating days recorded in
2011.  International operating days for the three months ended December
31, 2012 increased 12 percent over the comparable prior year period to
3,010 operating days compared to 2,698 operating days in the fourth
quarter of 2011.

Stronger demand for oilfield services in Latin America and throughout
the eastern hemisphere increased operating activity and revenue rates
in 2012 leading to improved operating and financial results when
compared to 2011.  In 2011 international operating results were
weakened due to the disruption of operations arising from challenges
outside of the Company’s control, including severe flooding in
Australia and political unrest in parts of the Middle East and North
Africa.  The Company resumed its operations in Libya late in 2012 with
the start-up of one drilling rig and a second drilling rig is expected
to start-up in the first half of 2013.

The Company added two new ADRs to its Australian equipment fleet in
2012.  In addition, one drilling rig was transferred to Australia from
the Company’s Canadian drilling rig fleet and one drilling rig was
transferred to Latin America from the Company’s United States drilling
rig fleet during the year.  The Company also decommissioned or disposed
of three inactive drilling rigs from its international operations
during the year and six drilling rigs were transferred from Mexico to
the United States operations.

Consistent with the translation of results from the Company’s United
States operations, the operating results from the Company’s
international operations were further improved on translation into
Canadian dollars by the strengthening of the United States dollar
relative to the Canadian dollar in 2012 when compared to the prior
year.

Depreciation

Depreciation expense increased 24 percent to $220.2 million for the year
ended December 31, 2012 compared with $177.9 million for the year ended
December 31, 2011.  Depreciation expense totaled $54.0 million for the
fourth quarter of 2012 compared with $57.5 million for the fourth
quarter of 2011, a decrease of six percent.  The decrease in
depreciation for the fourth quarter of 2012 reflects the reduced
operating activity for the three months ended December 31, 2012
compared to the three months ended December 31, 2011.  Higher
depreciation expense in 2012 over 2011 is attributable to higher-valued
drilling and well servicing rigs being added to the equipment fleet
throughout 2012 as well as a full year of depreciation being taken on
the drilling rigs operating in Ensign US Southern.

General and Administrative Expense

General and administrative expense totaled $80.8 million (3.7 percent of
revenue) for the year ended December 31, 2012 compared with $70.3
million (3.7 percent of revenue) for the year ended December 31, 2011,
an increase of 15 percent.   General and administrative expense
increased four percent to $21.6 million (4.1 percent of revenue) for
the fourth quarter of 2012 compared with $20.9 million (3.6 percent of
revenue) for the fourth quarter of 2011.  The increase in general and
administrative expense was incurred to support the expectations for
increased operating activity, the addition of Ensign US Southern in the
third quarter of 2011, and reflects the negative translational impact
of a stronger United States dollar on United States and international
administrative expenses in the current year.

Share-Based Compensation (Recovery) Expense

Share-based compensation (recovery) expense  arises from the
Black-Scholes valuation accounting associated with the Company’s
share-based compensation plans, whereby the liability associated with
share-based compensation is adjusted for the effect of granting and
vesting of employee stock options and changes in the underlying price
of the Company’s common shares.

For the 2012 fiscal year, share-based compensation was a recovery of
$3.4 million compared with an expense of $6.6 million for the year
ended December 31, 2011.  For the three months ended December 31, 2012,
share-based compensation recovery was $0.8 million compared with an
expense of $8.1 million recorded in the fourth quarter of 2011.  The
decrease in share-based compensation expense for the three and twelve
months ended December 31, 2012 arises from the change in the fair value
of share-based compensation liability primarily due to a decrease in
the price of the Company’s common shares during the year and the expiry
of options in the year.  The closing price of the Company’s common
shares was $15.37 at December 31, 2012, compared with $16.25 at
December 31, 2011.

Interest Expense

The Company increased its Global Facility by $150.0 million to $400.0
million in the second quarter of 2012; and also repaid in full the USD
$400.0 million term loan incurred to finance the September 2011
acquisition of Rowan Land Drilling during the first half of the year. 
Interest is incurred on the Company’s $10.0 million Canadian-based
revolving credit facility (the “Canadian Facility”), the $400.0 million
Global Facility, the USD $300.0 million Notes issued in February 2012
and the portion of the USD $400.0 million term loan outstanding during
the first half of 2012.  The amortization of deferred financing costs
associated with the issuance of the Company’s long-term debt is
included in interest expense for the three and twelve month periods
ended December 31, 2012 and 2011.

The increase in interest expense in 2012 compared to 2011 reflects the
increases in credit facilities in 2012 and a full year of interest
being incurred on the Company’s long-term debt which was added to the
Company’s capital structure in September 2011.

Foreign Exchange and Other (Loss/(Gain))

Included in this amount are foreign currency movements in the Company’s
subsidiaries which have functional currencies other than Canadian
dollars.  In general the United States dollar strengthened in 2012
compared to 2011 when compared to other world currencies but weakened
against the Canadian dollar at December 31, 2012 compared to December
31, 2011.

Income Taxes

The effective income tax rate for the year ended December 31, 2012 was
31.9 percent compared with 31.8 percent for the year ended December 31,
2011.  The effective income tax rate for the three months ended
December 31, 2012 was 26.9 percent compared with 38.5 percent for the
three months ended December 31, 2011.  The increase in the current
portion and decrease in the proportion of deferred income tax in the
year ended December 31, 2012 when compared with the prior year is
primarily attributable to the phased elimination of the deferral of
income tax related to the Company’s partnerships operating in Canada.

Financial Position

The following chart outlines significant changes in the consolidated
statement of financial position from December 31, 2011 to December 31,
2012:

Funds from Operations and Working Capital

Funds from operations totaled a record $500.5 million ($3.28 per common
share) for 2012, an increase of five percent compared to $475.6 million
($3.11 per common share) generated in 2011.  During the three months
ended December 31, 2012, the Company generated funds from operations of
$117.1 million ($0.77 per common share) compared with $140.5 million
($0.92 per common share) for the three months ended December 31, 2011,
a decrease of 17 percent.  The decrease in funds from operations for
the fourth quarter of 2012 compared to the fourth quarter of 2011
reflects the reduced operating activity in North America in the fourth
quarter of the current year compared to the fourth quarter of 2011. 
The increase in funds from operations in 2012 compared to 2011 is due
to growth of the Company’s operations, particularly in the United
States and increased demand for international oilfield services.

At December 31, 2012, the Company’s working capital totaled $13.9
million compared to negative working capital of $10.2 million at
December 31, 2011.  In 2011 the Company utilized its cash resources to
partially fund the acquisition of Rowan Land Drilling.  This resulted
in a temporary negative working capital balance in the prior year.  The
Company expects the growth in operating results, combined with current
and future credit facilities, to fully support current operating and
capital requirements.  Existing revolving credit facilities provide for
total borrowings of $410.0 million, of which $164.3 million was
available as at December 31, 2012.

Investing Activities

The Company did not complete any significant acquisitions in 2012. 
Effective September 1, 2011 the Company acquired Rowan Land Drilling
for USD $510.0 million plus working capital of USD $5.5 million.  Rowan
Land Drilling was comprised of 30 deeper capacity electric land
drilling rigs in the southern United States. The purchase was funded
with existing cash balances and expanded credit facilities, including
an unsecured term loan of USD $400.0 million.

Purchases of property and equipment for the year ended December 31, 2012
totaled $306.7 million (2011 – $386.8 million).  The purchases of
property and equipment relate primarily to expenditures made pursuant
to the Company’s ongoing new build program.  Significant additions as a
result of the new build program included:

• Completion of six new ADR^® drilling rigs in Canada (three in the first quarter and one in each of
  the second, third and fourth quarters);
• Completion of five new ADR^® drilling rigs in the United States (two in the first quarter, one in
  the second quarter and two in the third quarter);
• Construction of 12 new well servicing rigs in the United States (three
  in each of the first and second quarters, five in the third quarter and
  one in the fourth quarter); and
• Completion of two new ADR^® drilling rigs in Australia, both in the third quarter.

Financing Activities

The Company’s Global Facility was increased by $150.0 million during the
second quarter of 2012 to a new limit of $400.0 million.  Additionally,
the Company has available a $10.0 million Canadian Facility.  The
Global Facility is available to the Company and certain of its
wholly-owned subsidiaries, and may be drawn in Canadian, United States
or Australian dollars, up to the equivalent value of $400.0 million
Canadian dollars.  The amount available under the Canadian Facility is
$10.0 million or the equivalent in United States dollars.

The change in the operating lines of credit for the year ended December
31, 2012 reflects funding for the ongoing new build program which is
anticipated to deliver an additional eight new ADR^® drilling rigs and six new well servicing rigs throughout 2013.  As of
December 31, 2012, the operating lines of credit are primarily being
used to fund the completion of the most recent new build program and to
support international operations.

In February 2012, the Company completed the private placement of USD
$300.0 million of senior unsecured notes (the “Notes”), with the
proceeds from the issuance being used to repay a portion of the term
loan.  The Notes consist of: USD $100.0 million in five year notes with
an interest rate of 3.43 percent and a maturity date of February 22,
2017; USD $100.0 million in seven year notes with an interest rate of
3.97 percent and a maturity date of February 22, 2019; and USD $100.0
million in ten year notes with an interest rate of 4.54 percent and a
maturity date of February 22, 2022.  The Notes rank equally with the
Company’s Global Facility.  Proceeds from the issuance of the Notes in
combination with internally generated cash flows and expanded credit
facilities were used to fully repay the USD $400.0 million unsecured
term loan incurred in the prior year to partially finance the
acquisition of Rowan Land Drilling.   Financing costs associated with
the issuance of the Company’s long-term debt are being deferred and
amortized using the effective interest method.

On June 14, 2012 the Company received approval from the Toronto Stock
Exchange to acquire for cancellation up to three percent of the
Company’s issued and outstanding common shares under a Normal Course
Issuer Bid (the “Bid”).  The Company may purchase up to 4,596,397
common shares for cancellation.  The Bid commenced on June 18, 2012 and
will terminate on June 17, 2013 or such earlier time as the Bid is
completed or terminated at the option of the Company.  As at December
31, 2012, no common shares have been purchased and cancelled pursuant
to the Bid.

The Company previously had a Bid that commenced on June 7, 2011 and
terminated on June 6, 2012, under which no common shares were purchased
and cancelled.

The Company increased its dividend in 2012 with a 4.8 percent fourth
quarter increase in the quarterly dividend rate to $0.110 per common
share from the previous quarterly dividend rate of $0.105 per common
share.  During the year ended December 31, 2012, the Company declared
dividends of $0.4250 per common share, an increase of nine percent over
dividends of $0.3900 per common share declared in 2011.  The Company
had nominal receipts from the issuance of common shares in connection
with the employee stock option program in 2012 compared to nil in 2011.

Subsequent to December 31, 2012, the Company declared a dividend for the
first quarter of 2013. A quarterly dividend of $0.110 per common share
is payable April 5, 2013 to all Common Shareholders of record as of
March 27, 2013.  The dividend is pursuant to the quarterly dividend
policy adopted by the Company.  Pursuant to subsection 89(1) of the
Canadian Income Tax Act (“ITA”), the dividend being paid is designated
as an eligible dividend, as defined in subsection 89(1) of the ITA.

New Builds

During the year ended December 31, 2012, the Company commissioned six
new ADR^® drilling rigs in Canada; five new ADR^® drilling rigs and 12 new well servicing rigs in the United States; and
two new ADR^® drilling rigs in Australia.

The remaining new build estimated delivery schedule, by geographic area,
is as follows:

Outlook

Recently, there have been encouraging signs of improvement in the
general global economic outlook.  The stimulus commitments by the
European Central Bank and commitments to austerity appear to signal a
recovery for the Eurozone, although at a very gradual pace.  Continued
job growth and an early housing recovery are positive factors in the
United States, subject to ongoing debates regarding budgetary policies
in the President’s second term of office.  Against this improving
economic backdrop, global crude oil commodity prices remain firm, in
part due to geopolitical tensions; however, widening regional crude oil
price differentials between Brent and WTI for the United States and a
further regional discount in Canada, produced drag on the industry. 
Natural gas prices in North America have stabilized at low levels and
prospects for recovery appear weak for the foreseeable future; given
the abundance of shale resources, it remains to be seen when the
balance of supply and demand for natural gas will equalize.

Activity levels in the Company’s Canadian operations trended down over
the latter three quarters of 2012 compared to the prior year and
increased competitive pressures are continuing to place downward
pressure on activity and revenue rates.  The Company expects the coming
year to present continuing challenges in sustaining current activity
levels.  This condition will likely persist until regional
deliverability discounts on crude oil netbacks are largely eliminated
by new pipeline capacity.  Increases in demand and improvements in
prices for natural gas are likely an eventual outcome, but
game-changing technologies and anemic economic growth prospects will
continue to delay recovery in this highly export-dependent market.

In the United States, Company activity levels remained fairly consistent
throughout the year in the face of softening industry demand in the
latter half of the year.  The redirection of oilfield services
equipment away from natural gas development to crude oil and
liquids-rich plays added to the challenge of maintaining equipment
utilization.  The coming year is expected to be a continuation of the
current year, with stable activity in liquids and ongoing weakness in
natural gas development.

The Company’s international operations exceeded expectations during the
year, with operating days up eight percent and total annual revenues up
27 percent over the previous year.  In addition to a broad base of
long-term contracts in most of the Company’s operating regions, growth
in international operations is expected to continue in 2013, as new
opportunities are pursued and global demand for crude oil and natural
gas increases in developing regions.

Despite the headwinds encountered during 2012, the Company continued to
successfully pursue its fleet expansion, modernization and redeployment
program.  In addition, debt net of cash was reduced by $146.4 million
year-over-year. This improving financial strength will position the
Company well in pursuing its strategy of opportunistic growth in the
coming year and beyond.

Risks and Uncertainties

This document contains forward-looking statements based upon current
expectations that involve a number of business risks and
uncertainties.  The factors that could cause results to differ
materially include, but are not limited to, political and economic
conditions, crude oil and natural gas prices, foreign currency
fluctuations, weather conditions and the ability of oil and natural gas
companies to raise capital or other unforeseen conditions which could
impact on the use of the services supplied by the Company.

Conference Call

A conference call will be held to discuss the Company’s year-end 2012
results at 2:00 p.m. MDT (4:00 p.m. EDT) on Monday, March 18, 2013. 
The conference call number is (647) 427-7450 (in Toronto) or
1-888-231-8191 (outside Toronto).  A taped recording will be available
until March 25, 2013 by dialing 1-416-849-0833 (in Toronto) or
1-855-859-2056 (outside Toronto) and entering the reservation number
20090003.  A live broadcast may be accessed through the Company’s web
site at www.ensignenergy.com.

Ensign Energy Services Inc. is an international oilfield services
contractor and is listed on the Toronto Stock Exchange under the
trading symbol ESI.

SOURCE: Ensign Energy Services Inc.

Glenn Dagenais, Executive Vice President Finance and Chief Financial Officer, (403) 262-1361.