Complete Production Services, Inc. Second Quarter Earnings Increase 65%

Complete Production Services, Inc. (NYSE:CPX) today reported a 65% increase in second quarter income from continuing operations to $43.8 million, or $0.60 per diluted share, compared with income from continuing operations of $26.6 million, or $0.39 per diluted share for the second quarter of 2006. Revenue for the quarter was $410.7 million, up 55% over the second quarter of 2006. Operating income increased to $83.9 million for the quarter, up 66% compared to the second quarter of 2006 operating income, with operating income margins at 20.4% and 19.1% for the quarters, respectively. "I am pleased to report another quarter of solid results for Complete,” noted Joe Winkler, Chairman and Chief Executive Officer, "especially in light of the stronger than average seasonal downturn in Canada, and the heavy rainfall and flooding encountered during the quarter in some of our most active areas.” Second quarter 2007 earnings before interest, taxes, depreciation and amortization (EBITDA, as defined below), totaled $117.4 million, up 74% over the prior year. EBITDA margins increased to 28.6% in the quarter, up from 25.5% in the second quarter of 2006 due primarily to strong performance in the Completion and Production Services segment. Revenues for the Completion and Production Services segment for the second quarter of 2007 were $307.2 million, up 68% over the prior year, with EBITDA of $101.2 million compared to $49.3 million for the second quarter of the prior year. EBITDA margins for the segment were 32.9%, up from 26.9% in the prior year quarter. "The significant revenue growth and excellent margin contributions were the result of our long-term strategies to selectively position ourselves in basins which we believe will have the strongest activity levels and to invest in the best people and equipment,” commented Mr. Winkler. "We will continue to execute our plan throughout the remainder of 2007.” Drilling Services revenue was $60.2 million for the second quarter of 2007, up 18% over the prior year quarter with EBITDA margins of 31.6%, and Product Sales revenue increased 44% to $43.3 million for the second quarter of 2007, with EBITDA margins of 12.6%. Complete Production Services, Inc. is a leading oilfield service provider focused on the completion and production phases of oil and gas wells. The company has established a significant presence in unconventional gas plays in North America that it believes have the highest potential for long-term growth. Conference Call Complete will hold a conference call to discuss second quarter 2007 results on Wednesday, July 25 at 11:00 a.m. Central Time. To participate in the live conference call, dial 866-831-6243 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 19022240. The conference call will be available for replay beginning at 2:00 p.m., July 25, 2007, and will be available until August 1, 2007. To access the conference call replay, please call 888-286-8010 and use the passcode: 65835333. The call is also being webcast and can be accessed at our website at www.completeproduction.com. The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risk and uncertainties. The forward-looking statements included herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the oilfield service industry. The company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release. Management evaluates the performance of Complete’s operating segments using a non-GAAP financial measure, EBITDA. EBITDA is calculated as net income from continuing operations before net interest expense, taxes, depreciation and amortization and minority interest. EBITDA is not a substitute for the GAAP measures of earnings and cash flow. EBITDA is used in this press release because our management considers it an important supplemental measure of performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Complete Production Services, Inc. Consolidated Statements of Operations For the Quarters and Six Months Ended June 30, 2007 and 2006 (in thousands except per share data)   Quarter Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 (unaudited) (unaudited) (unaudited) (unaudited) Revenue: Services $ 367,405 $ 234,420 $ 733,440 $ 469,539 Products   43,310     30,116     84,342     57,343   410,715 264,536 817,782 526,882   Cost of services 204,364 139,323 407,877 274,834 Cost of products 33,654 21,942 65,465 41,825 General and administrative expense 55,344 35,752 105,914 72,198 Depreciation and amortization   33,492     16,999     62,462     32,606   326,854 214,016 641,718 421,463         Operating income 83,861 50,520 176,064 105,419   Interest expense 15,064 9,488 30,689 20,170 Interest income (316 ) (1,015 ) (528 ) (1,022 )   Income from continuing operations before minority interest and taxes           69,113 42,047 145,903 86,271   Minority interest, net of tax (205 ) (161 ) 56 144         Income from continuing operations before taxes 69,318 42,208 145,847 86,127   Tax provision 25,535 15,607 54,714 32,611         Income from continuing operations 43,783 26,601 91,133 53,516   Income from discontinued operations (net of tax) - 553 - 1,751         Net income $ 43,783   $ 27,154   $ 91,133   $ 55,267     Basic earnings per share: Continuing operations $ 0.61 $ 0.40 $ 1.27 $ 0.87 Discontinued operations $ -   $ (0.00 ) $ -   $ 0.03   $ 0.61   $ 0.40   $ 1.27   $ 0.90   Diluted earnings per share: Continuing operations $ 0.60 $ 0.39 $ 1.25 $ 0.84 Discontinued operations $ -   $ (0.00 ) $ -   $ 0.02   $ 0.60   $ 0.39   $ 1.25   $ 0.86   Weighted average shares outstanding: Basic 71,916 67,067 71,711 61,366 Diluted 73,367 69,065 73,195 63,953 Complete Production Services, Inc. Condensed Consolidated Balance Sheets As of June 30, 2007 and December 31, 2006 (in thousands)   June 30, December 31, 2007 2006 (unaudited) (unaudited) Assets: Current assets $ 400,657 $ 390,640 Property, plant and equipment, net 927,484 771,703 Goodwill 571,644 552,671 Other long-term assets   28,338     25,310   Total assets   1,928,123     1,740,324     Liabilities and Stockholders' Equity: Current liabilities 134,703 161,405 Long-term debt 839,813 750,577 Long-term deferred tax liabilities 105,496 90,805 Minority interest   2,631     2,316   Total liabilities and minority interest 1,082,643 1,005,103   Common stock 721 714 Treasury stock (202 ) (202 ) Additional paid-in capital 574,273 563,006 Retained earnings 247,104 155,971 Cumulative translation adjustment   23,584     15,732   Total stockholders' equity 845,480 735,221     Total liabilities and stockholders' equity $ 1,928,123   $ 1,740,324   Complete Production Services, Inc. Cash Flow Data For the Six Months Ended June 30, 2007 (in thousands)   June 30, 2007 (unaudited) Cash flows provide by/(used for): Operating activities $ 139,924 Investing activities: Capital expenditures $ (194,479 ) Other investing activities $ (36,628 ) Financing activities $ 82,235 Complete Production Services, Inc. Consolidated Segment Information For the Quarters Ended June 30, 2007 and 2006 and March 31, 2007 (in thousands, except percentages)   Quarter Ended June 30, June 30, March 31, 2007 2006 2007 (unaudited) (unaudited) (unaudited) Revenue: Completion and production services $ 307,212 $ 183,270 $ 307,639 Drilling services 60,193 51,150 58,396 Products   43,310     30,116     41,032   Total revenues $ 410,715   $ 264,536   $ 407,067     EBITDA: (1) Completion and production services $ 101,180 $ 49,291 $ 104,162 Drilling services 19,004 18,236 18,068 Products 5,440 3,988 5,157 Corporate and other   (8,271 )   (3,996 )   (6,214 ) Total EBITDA $ 117,353   $ 67,519   $ 121,173     EBITDA as a % of Revenue: Completion and production services 32.9 % 26.9 % 33.9 % Drilling services 31.6 % 35.7 % 30.9 % Products 12.6 % 13.2 % 12.6 % Total 28.6 % 25.5 % 29.8 %     Six Months Ended June 30, 2007 2006 (unaudited) (unaudited) Revenue: Completion and production services $ 614,851 $ 374,359 Drilling services 118,589 95,180 Products   84,342     57,343   Total revenues $ 817,782   $ 526,882     EBITDA: (1) Completion and production services $ 205,342 $ 103,901 Drilling services 37,072 34,257 Products 10,596 7,794 Corporate and other   (14,484 )   (7,927 ) Total EBITDA $ 238,526   $ 138,025     EBITDA as a % of Revenue: Completion and production services 33.4 % 27.8 % Drilling services 31.3 % 36.0 % Products 12.6 % 13.6 % Total 29.2 % 26.2 %     (1) EBITDA is a non-GAAP measure used by management, as defined in the last paragraph of this press release.   Footnote: The results for all periods exclude discontinued operations. Complete Production Services, Inc. Reconciliation of EBITDA to the Most Comparable GAAP Measure For the Quarters Ended June 30, 2007 and 2006 and March 31, 2007 and the Six Months Ended June 30, 2007 and 2006 (unaudited, in thousands) Completion & Production Services Drilling Services   Corporate & Other Products Total Quarter Ended June 30, 2007: EBITDA $ 101,180 $ 19,004 $ 5,440 $ (8,271 ) $ 117,353 Depreciation & amortization   28,134   4,017   702   639     33,492 Operating income (loss) $ 73,046 $ 14,987 $ 4,738 $ (8,910 ) $ 83,861   Quarter Ended June 30, 2006: EBITDA $ 49,291 $ 18,236 $ 3,988 $ (3,996 ) $ 67,519 Depreciation & amortization   14,001   2,284   449   265     16,999 Operating income (loss) $ 35,290 $ 15,952 $ 3,539 $ (4,261 ) $ 50,520   Quarter Ended March 31, 2007: EBITDA $ 104,162 $ 18,068 $ 5,157 $ (6,214 ) $ 121,173 Depreciation & amortization   24,284   3,635   678   373     28,970 Operating income (loss) $ 79,878 $ 14,433 $ 4,479 $ (6,587 ) $ 92,203   Six Months Ended June 30, 2007: EBITDA $ 205,342 $ 37,072 $ 10,596 $ (14,484 ) $ 238,526 Depreciation & amortization   52,418   7,652   1,380   1,012     62,462 Operating income (loss) $ 152,924 $ 29,420 $ 9,216 $ (15,496 ) $ 176,064   Six Months Ended June 30, 2006: EBITDA $ 103,901 $ 34,257 $ 7,794 $ (7,927 ) $ 138,025 Depreciation & amortization   26,835   4,302   832   637     32,606 Operating income (loss) $ 77,066 $ 29,955 $ 6,962 $ (8,564 ) $ 105,419