EANS-News: C.A.T. oil AG / C.A.T. oil enters H2 with confidence after significant increase in earnings and profitability

- EBITDA up 19.7% YoY to EUR 26.8 million
- The EBITDA margin
expanded to 24.7%
- Earnings for FY 2010 expected to exceed prior
year’s level
- Capital expenditure program extended to prepare for
increasing demand in H2 2010 and beyond

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quarterly report/Half-Year-Report

Subtitle: - EBITDA up 19.7% YoY to EUR 26.8 million - The EBITDA
margin expanded to 24.7% - Earnings for FY 2010 expected to exceed
prior year’s level - Capital expenditure program extended to prepare
for increasing demand in H2 2010 and beyond

Wien (euro adhoc) - 30 August 2010 - C.A.T. oil AG (O2C, ISIN:
AT0000A00Y78), one of the leading providers of oil and gas field
services in Russia and Kazakhstan, today announced the results for
the first half of the Fiscal Year 2010. During the reporting period,
C.A.T. oil benefitted from the noticeable signs of an economic
recovery and increasing demand for oil field services. After the
challenging weather conditions at the beginning of the year, C.A.T.
oil´s operating capacity utilization returned to high levels in the
second quarter 2010. Although the increased demand has not yet been
reflected in the Company´s revenue growth, C.A.T. oil successfully
increased profitability and earnings during the reporting period, due
to its strategic focus on high margin services and efficiency
improvements across the business.

Manfred Kastner, CEO of C.A.T. oil, commented: "It is our prime
objective to achieve profitable growth for our Company and our
shareholders. We see 2010 to be a year of transition, during which we
implement portfolio optimizations and align our capacities towards
high margin services. Our results for the first half of 2010
demonstrate that this strategy has paid off. Although our
rationalization efforts led to a short-term decline in revenues, our
profitability and earnings further improved: Our EBITDA margin
achieved an impressive level of 24.7% and our EBITDA increased around
20% YoY to EUR 26.8 million. Backed by our strong performance in the
first two quarters, we enter the second half of the year with
confidence. We will continue to improve efficiency to support our
high margin levels and earnings growth. For the Full Year 2010 we
expect our earnings to be above the level of 2009."

Portfolio optimization and trend towards day rate contracts have
short-term effect on revenues

In the reporting period revenues declined 7.7% YoY to EUR 108.5
million (H1 2009: EUR 117.5 million), mainly reflecting three
developments: Firstly, the low activity levels in the first quarter
due to abnormally harsh weather conditions in Western Siberia,
secondly, the outsourcing of low margin auxiliary services and
thirdly, the trend towards sidetrack drilling contracts on a day rate
basis. Compared to turnkey arrangements, day rate contracts are based
on a different service and pricing model. Although they achieve
higher margins and therefore support profitability, they had a
negative impact on the Company´s revenue development in the
short-term due to lower per job revenue compared to turnkey
contracts. The total job count for the reporting period amounted to
1,409 jobs (H1 2009: 1,525 jobs) reflecting the lower utilization
levels at the beginning of the year and the outsourcing of workover
services. The average revenue per job stayed effectively flat YoY and
amounted to TEUR 77.0 in H1 2010 (H1 2009: TEUR 77.1).

Cost base further improved

Due to the rationalization of operations and the continued strict
cost management, the cost of sales was successfully reduced 11.8% YoY
to EUR 89.2 million in H1 2010 (H1 2009: EUR 101.1 million). Wages
and salaries declined by 8.2% YoY to EUR 14.6 million in the first
six months of the year (H1 2009: EUR 15.9 million), reflecting
further contraction in headcount to 2,455 employees (H1 2009: 3,104
employees). General and administrative expenses increased 11.8% YoY
to EUR 9.1 million (H1 2009: EUR 8.2 million) due to higher rental
and license expenses, consulting and professional fees.

Margin development reflects efficiency improvements

The consistent implementation of rationalization measurements is
reflected in the Company´s strong earnings before interest, corporate
tax, depreciation and amortization (EBITDA), which went up 19.7% YoY
to EUR 26.8 million (H1 2009: EUR 22.4 million). The EBITDA margin
expanded to 24.7% in H1 2010 from 19.1% in H1 2009. C.A.T. oil´s
earnings before interest and corporate tax (EBIT) rose 39.1% YoY to
EUR 12.4 million (H1 2009: EUR 8.9 million) with the EBIT margin
rising to 11.4% (H1 2009: 7.6%).

The net financial result for H1 2010 amounted to EUR 1.3 million (H1
2009: EUR -3.4 million), primarily reflecting foreign currency
exchange gains of EUR 0.9 million (H1 2009: loss of EUR 2.2 million)
on euro-denominated inter-company loans. C.A.T. oil´s pre-tax profit
improved 148.8% YoY to EUR 13.7 million during the reporting period
(H1 2009: EUR 5.5 million).

The Company´s net income rose 209.2% YoY to EUR 8.5 million in H1
2010 (H1 2009: EUR 2.7 million), resulting in earnings per share of
EUR 0.174 (H1 2009: EUR 0.056).

Strong operating cash flow and solid financial position

During the first half of 2010, C.A.T. oil was able to improve its
working capital turnover and, as a consequence, generate strong cash
flow from operating activities, which went up 50.2% YoY to EUR 33.5
million (H1 2009: EUR 22.3 million). The Company´s H1 2010 cash flow
from investing activities amounted to a net outflow of EUR 9.0
million (H1 2009: net outflow of EUR 6.2 million), which included the
proceeds from the sale of equipment as part of the outsourcing of
workover services. The Company´s cash flow from financing activities
was a net outflow of EUR 3.8 million in H1 2010 (H1 2009: net outflow
of EUR 15.8 million), which primarily reflects dividend payments of
EUR 5.9 million made in Q2 2010.

Cash and cash equivalents amounted to EUR 46.2 million as of 30 June
2010 that represents an increase of 58.8% over EUR 29.1 million as of
31 December 2009. The Company´s net cash rose 53.2% YoY to EUR 44.4
million as of 30 June 2010 (31 December 2009: EUR 29.0 million).
C.A.T. oil maintained a conservative financial strategy and, as a
result, was able to sustain a strong balance sheet with an equity
ratio of 78.6% as of 30 June 2010 (31 December 2009: 84.6%).

Outlook: Increasing demand and earnings growth expected for H2 2010

The H1 2010 results have demonstrated that C.A.T. oil successfully
achieved a sustainable increase in profitability through the ongoing
cost savings and its focus on high margin services. For the second
half of the year, the Company plans to continue optimizing its
portfolio and streamlining its operations. In addition, C.A.T. oil
remains dedicated to delivering high quality services, realizing
additional cross-selling potential and continues operating on a solid
financial basis.

For the Full Year 2010 the management expects revenues to be in the
range of EUR 215 million to EUR 225 million (based on a Rouble / Euro
exchange rate of 39). With further rationalization plans and the
intensified shift towards day rate contracts, the management believes
the Company should be able to sustain the H1 2010 margins in H2 2010
and attain the full year 2010 earnings above the 2009 levels.

Although economic uncertainties remain on a global basis, the
management expects current macroeconomic conditions in Russia and
Kazakhstan to remain intact. With an oil price above the level of USD
70 per barrel, C.A.T. oil anticipates the demand for sidetrack
drilling and hydraulic fracturing services to remain high in H2 2010
and to further increase in 2011.

As a consequence of the improved economic conditions and to meet the
increasing customer demand, the management has decided to extend the
Company´s capital expenditure program to EUR 35 million beyond mere
maintenance level of EUR 15 million: In the first instance, the
Company plans to upgrade a portion of its sidetrack drilling capacity
in H2 2010, secondly to expand pressure pumping capacity of its
existing fracturing fleets in late 2010 and beginning 2011 and
thirdly, to start investing in conventional drilling capacity in H2
2010. The Company has already placed purchase orders for three new
drilling rigs, which are expected to be operational in H2 2011, and
made appropriate preparatory steps for further expansion in 2011. The
Company´s 2010 capital expenditure program will be funded primarily
from the existing cash and cash flow from operations.

www.catoilag.com

Press contact:
Financial Dynamics GmbH

Carolin Amann Lucie Maucher
Tel.: +49 (0)69 92037-132 Tel.: +49 (0)69 92037-183
Email: carolin.amann@fd.com Email: lucie.maucher@fd.com

About C.A.T. oil AG:

C.A.T. oil AG is one of the leading providers of oil and gas field
services in Russia and Kazakhstan and is listed on the Frankfurt
Stock Exchange (SDAX). C.A.T. oil offers a wide spectrum of services
to increase the lifecycle of an oil field or to make abandoned oil
fields accessible. The Company´s growth is driven by three
significant factors: Existing oil fields need to be stimulated due to
shrinking oil and gas resources in order to optimize capacities.
Simultaneously, idle wells are reactivated or made accessible through
new methods in order to deploy wells to their maximum. Additionally
C.A.T. oil offers seismic services which help to identify new oil and
gas sources.

Since its foundation in 1991 in Celle, Germany, C.A.T. oil has built
up a leading hydraulic fracturing services business in Russia and
Kazakhstan. Following its IPO in 2006 the Company has invested more
than EUR 200 million in additional services and capacities: sidetrack
drilling has become the Company´s second core business. Apart from
the services mentioned above, C.A.T. oil´s diversified service
portfolio includes coiled tubing, formation evaluation services, well
work-over, cementing and seismic services. Due to the recent
expansion investments C.A.T. oil´s fleets and rigs are
state-of-the-art and therefore allow for time-efficient and effective
deployment. C.A.T. oil´s customer base includes the leading Russian
and Kazakh oil and gas producers amongst them Gazprom, KazMunaiGaz,
LUKOIL, Rosneft and TNK-BP. C.A.T. oil has a long-standing
relationship with these customers and has been a reliable service
provider since its market entrance in the early nineties.

The Company has its headquarters in Vienna and employed an average of
2,455 people on 30 June 2010, most of whom are based in Russia and
Kazakhstan. The Company´s current order book for 2010 amounts to
approximately EUR 239 million (based on a Rouble / Euro exchange rate
of 39).

Key financial figures for the first half of 2010

[in million EUR] H1 2010 H1 2009 Change in %
Revenues 108.5 117.5 -7.7
Cost of sales 89.2 101.1 -11.8
Gross profit 19.3 16.4 17.4
EBITDA 26.8 22.4 19.7
EBITDA margin (in%) 24.7 19.1
EBIT 12.4 8.9 39.1
EBIT margin (in%) 11.4 7.6
Net result for period 8.5 2.7 > 100
Earnings per share (in EUR) 0.174 0.056 > 100
Equity Ratio (in %) (1) 78.6 84.6

Cash flow from operating activities 33.5 22.3 50.2
Cash flow from investing activities -9.0 -6.2 45.4
Cash flow from financing activities -3.8 -15.8 75.8
Cash and cash equivalents (1) 46.2 29.1 58.8

Total job count 1,409 1,525 -7.6
Per-job revenue (in thou. EUR) 77.0 77.1 -
Employees 2,455 3,104 -20.9

(1) As of 30 June 2010 and 31 December 2009 respectively

Key financial figures for the second quarter 2010

[in million EUR] Q2 2010 Q2 2009 Change in %
Revenues 61.3 63.7 -3.8
Cost of sales 47.4 53.5 -11.3
Gross profit 13.9 10.3 35.0
EBITDA 17.8 14.3 24.2
EBITDA margin (in%) 29.0 22.5
EBIT 10.6 7.6 38.9
EBIT margin (in%) 17.3 12.0
Net result for period 7.5 3.7 > 100
Earnings per share (in EUR) 0.153 0.075

Cash flow from operating activities 33.8 8.4 > 100
Cash flow from investing activities -9.0 -3.0 > 100
Cash flow from financing activities -5.5 -6.7 17.4

Total job count 791 858 -7.8
Per-job revenue (in thou. EUR) 77.5 74.3 4.3

end of announcement euro adhoc
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ots Originaltext: C.A.T. oil AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Lucie Maucher

Tel.: +49 (69) 920 37-183

E-Mail: lucie.maucher@fd.com

Branche: Oil & Gas - Upstream activities
ISIN: AT0000A00Y78
WKN: A0JKWU
Index: SDAX, Classic All Share, Prime All Share
Börsen: Frankfurt / regulated dealing/prime standard