C.A.T. oil AG: Strong Demand and Revenue Growth Further Support Expansion of Business in Q1 2011

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 its
results for the first quarter 2011. C.A.T. oil has had a good start to
2011 and was able to benefit from a supportive macroeconomic
environment, the increased customer demand and the milder winter weather
conditions. C.A.T. oil increased its total job count by 24.6% yoy to 770
jobs - the highest level reached in a first quarter in the Company′s
history. C.A.T. oil′s revenues rose by more than 29% yoy to EUR 61.0
million. With its business expansion well on track, C.A.T. oil confirms
its outlook for the financial year 2011.

Manfred Kastner, CEO of C.A.T. oil, commented: 'We have successfully
entered into 2011 and continued to push our top-line growth. Given our
customers have increased their deployment levels, demand for our
services went up as well. In addition, we have begun to expand our
business by putting two new sidetrack drilling rigs into operation. This
is just the beginning, we have busy times ahead of us: We will
capitalize on the solid demand for our services to further increase
revenues and at the same time set up our high class conventional
drilling as a third core business.?

Revenues of EUR 61.0 million strongly above previous year′s level

During the reporting period, C.A.T. oil benefited from a stronger demand
for its services and the milder winter conditions in West Siberia
compared to Q1 2010. Revenues increased 29.4% yoy to EUR 61.0 million
(Q1 2010: EUR 47.1 million) and reflected a 24.6% yoy upturn in the job
count to 770 jobs (Q1 2010: 618 jobs), as well as stronger average per
job revenues.

The increased utilization was particularly realized in the fracturing
and auxiliary businesses with the job count rising by 34.8% yoy and
10.8% yoy, respectively. In contrast, the total number of sidetrack
drilling jobs was 17.0% yoy below the prior year′s quarter and reflected
three developments: a longer execution of individual sidetrack drilling
operations due to the difficult geological conditions, a rig being moved
to a new region of operations, as well as the installation process of
two new sidetrack drilling rigs. C.A.T. oil increased its average
revenue per job by 6.9% yoy to TEUR 79 (Q1 2010: TEUR 74) and benefited
from the improved pricing environment in the fracturing business, as
well as a more favorable exchange rate of 39.9 rouble per euro (Q1 2010:
41.4 rouble per euro).

Cost base reflects higher utilization and business expansion

During the reporting period cost of sales increased by 33.1% yoy to EUR
55.5 million (Q1 2010: EUR 41.7 million) and primarily reflected the
significantly higher operating activities, as well as the up-front costs
related to the adaptation and mobilization of the two new sidetrack
drilling rigs.

Although cost of sales developed roughly in line with C.A.T. oil′s
increased utilization levels, the overall cost base was impacted by the
set up of new capacities across the business and the slower than
expected operations in parts of the sidetrack drilling business. The
preparations for the capacity expansion were well underway during Q1
2011. The Company expects the nine new conventional drilling rigs to be
delivered during the course of the second half of 2011.

General and administrative expenses increased by 17.2% yoy to EUR 4.9
million (Q1 2010: EUR 4.2 million), primarily due to higher wages and
social funds contribution, bank charges, license and insurance fees as
well as rental expenses. The total weighted average headcount contracted
7.6% yoy to 2,362 employees (Q1 2010: 2,557 employees) as the
outsourcing of support and auxiliary functions continued during the
reporting period.

Manfred Kastner said: 'The times of easy oil are long gone. Efficient
methods to access wells and stimulate deployment have become more
decisive factors than ever before. In the past we have already made use
of this development and the expansion into high class conventional
drilling therefore marks the next logical step for us. Of course, it
requires financial and personnel resources. However, we are confident
that we will be rewarded. With our expanded business we will be even
better positioned to deliver tailored services and generate additional
earnings.?

Earnings situation influenced by business expansion and impacts on
sidetracking activities

C.A.T. oil′s first quarter earnings have been influenced by its
diversification into the third core business and the lower than expected
results of the sidetrack drilling business. Although the Company
realized strong revenue growth, the investment-related costs could not
be fully offset. Whilst gross profit came in slightly above the prior
year quarter at EUR 5.5 million (Q1 2010: EUR 5.4 million), EBITDA
decreased by 4.4% yoy to EUR 8.7 million (Q1 2010: EUR 9.1 million). The
EBITDA margin amounted to 14.2% (Q1 2010: 19.2%). EBIT amounted to EUR
0.5 million (Q1 2010: EUR 1.8 million). The decline in EBIT primarily
reflects the combined effect of a lower EBITDA and a higher depreciation
expense related to investments in new capacity. C.A.T. oil′s net result
amounted to EUR -1.0 million (Q1 2010: EUR 1.1 million), reflecting an
extraordinarily high corporate tax expense of EUR 1.8 million, largely
related to the utilization of tax assets and dividend payments by the
subsidiaries. This effect is expected to even out over the course of the
year.

Capital expenditure primarily funded through cash flow

During the first quarter of 2011, funds from operations went down 20.4%
yoy to EUR 7.9 million (Q1 2010: EUR 10.0 million) largely due to a
lower pre-tax profit. Despite seasonally high working capital
requirements caused by the delays in the processing of invoices, cash
flow from operating activities amounted to a net inflow of EUR 0.3
million (Q1 2010: net outflow of EUR 0.4 million). Capital expenditure
increased to EUR 27.8 million (from EUR 2.8 million in Q1 2010) due to
the payments for the new rigs. Cash flow from investing activities was a
net outflow of EUR 27.4 million (Q1 2010: net outflow of TEUR 40) that
included the proceeds from the sale of equipment of EUR 0.4 million (Q1
2010: EUR 2.8 million). Cash flow from financing activities was a net
inflow of EUR 6.0 million in Q1 2011 (Q1 2010: EUR 1.7 million), which
primarily reflected the increase in long-term and short-term borrowings.

As of 31 March 2011, cash and cash equivalents amounted to EUR 12.8
million (31 December 2010: EUR 34.1 million). C.A.T. oil′s balance sheet
remained strong with a healthy equity ratio of 79.4% as of 31 March 2011
(31 December 2010: 83.2%).

Outlook for the full year 2011 confirmed

With the macroeconomic environment expected to remain supportive and
demand to stay solid, C.A.T. oil confirms its outlook for the full year
2011. C.A.T. oil is confident to win additional orders and expects total
revenues for 2011 to come in above the current order book level of EUR
230 million (based on an exchange rate of 40 rouble per euro). In
addition, C.A.T. oil remains committed to profitable growth and aims at
achieving the 2011 EBITDA margin close to the 2010 level. C.A.T. oil
will further proceed with the rationalization of its business and will
completely exit low margin workover services in Q2 2011. Moreover, the
Company will capitalize on its strong market position in Russia and
Kazakhstan to realize additional revenue growth.

www.catoilag.com

¹ As of 31 March 2011 and 31 March 2010 respectively

C.A.T. oil AG

Investor Relations

0043-1-535-23-20-30

ir@catoilag.com

or

Financial
Dynamics

Carolin Amann / Thomas Krammer

catoilag@fd.com