C.A.T. oil Successfully Boosts Revenues and Earnings in 9M 2012

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 third quarter and the
first nine months of 2012. The Company demonstrated strong operating and
financial performance driven by a vital customer demand, the improved
price mix, and positive contributions from the new conventional drilling
service. Backed by a historic quarterly high in revenues in Q3, C.A.T.
oil increased its revenues by 17.5% yoy to EUR 246.3 million on a nine
months basis. At the same time the Company′s earnings before interest,
tax and depreciation (EBITDA) surged by 28.1% yoy to EUR 58.8 million in
9M, resulting in the EBITDA margin expansion to 23.9%. Concurrently, the
net income improved by 20.5% yoy to EUR 15.2 million. Based upon the
strong performance in the first nine months of the year, robust market
fundamentals and favorable current operating activity levels, C.A.T. oil
has reiterated its guidance for FY2012. In addition, the Company decided
to expand the 2012 capital expenditure program to accommodate down
payments for the expansion of its sidetracking and fracturing operating
capacities in fiscal year 2013.

Manfred Kastner, CEO of C.A.T. oil, commented: 'We have very good news
to report, both, from a financial and operational perspective. The
previous quarter was the strongest Q3 in our Company′s history: With
revenues at EUR 88.5 million we achieved a new all time quarterly
revenue high accompanied by one of the best EBITDA margin performances
ever. While running at full speed in our traditional services, we
finalized the setup of our third core service: All the nine new drilling
rigs are now operational. C.A.T. oil possesses a well balanced portfolio
of specific, yet complimentary services, which makes us a reliable and
strategic partner for the key oil and gas producers in Russia and
Kazakhstan. Based on our strong performance we reiterate our outlook for
fiscal year 2012.?

Strong revenue boost

The Company′s revenues went up by 17.5% yoy to EUR 246.3 million on a
nine month basis (9M 2011: EUR 209.7 million) and 18.5% yoy to EUR 88.5
million in Q3 (Q3 2011: EUR 74.7 million). The rise was primarily driven
by strong customers′ demand, the higher job size and complexity and
favorable pricing mix. The new conventional drilling service which was
successively implemented in the course of the year generated profitable
contributions and, therefore, accelerated the Company′s positive
momentum. The average per job revenue went up by 17.5% yoy to TEUR 95 in
9M (9M 2011: TEUR 81) and 24.7% yoy to TEUR 100 in Q3 (Q3 2011: TEUR
80). On a nine month basis the total service job count stayed
effectively flat yoy at 2,561 jobs (9M 2011: 2,578 jobs) and declined by
5.0% yoy to 884 jobs in Q3 (Q3 2011: 930 jobs) as more complex jobs
involved longer execution time.

Cost base reflects scale effects and strict cost management

Cost of sales increased by 15.8% yoy to EUR 205.3 million in 9M 2012 (9M
2011: EUR 177.4 million) driven by the higher job size and complexity,
the share of sidetracking jobs on a turnkey basis and the new drilling
business. However, cost of sales lagged behind the top-line growth due
to strict cost management and economies of scale. The Company′s total
weighted average headcount increased by 4.0% to 2,469 employees in 9M
(9M 2011: 2,373 employees) primarily due to the latest hires for the new
high class conventional drilling.

Strong EBITDA and EBITDA margin development

The Company′s EBITDA jumped by 28.1% to EUR 58.8 million in 9M (9M 2011:
EUR 45.9 million) and 32.4% yoy to EUR 25.0 million in Q3 (Q3 2011: EUR
18.9 million). The EBITDA margin expanded substantially to 23.9% yoy in
9M (9M 2011: 21.9%) and reached an impressive level of 28.3% yoy in Q3
(Q3 2011: 25.3%). The strong profitability underpins the exceptional
performance, which is based on solid revenue growth and high cost
efficiency. Earnings before interest and tax (EBIT) increased by 33.4%
yoy to EUR 24.8 million in 9M (9M 2011: EUR 18.6 million) and the EBIT
margin widened to 10.1% yoy in 9M (9M 2011: 8.9%).

Net income increased by 20.5% in 9M

C.A.T. oil increased its net income by 20.5% yoy to EUR 15.2 million in
9M (9M 2011: EUR 12.6 million) and 48.4% yoy to EUR 8.6 million in Q3
(Q3 2011: EUR 5.8 million). The development was bolstered by the
improved financial result, which amounted to EUR -2.3 million (9M 2011:
EUR -3.1 million) and EUR 0.4 million in Q3 (Q3 2011: EUR -3.3 million).

Ongoing strong cash generation

Funds from operations went up by 28.0% yoy to EUR 51.7 million in 9M (9M
2011: EUR 40.4 million) and cash flow from operating activities staged a
53.4% yoy increase to a net inflow of EUR 46.2 million (9M 2011: net
inflow of EUR 30.1 million) due to the Company′s strong operational
performance and consistent working capital management. Capital
expenditure decreased by 77.0% yoy to EUR 19.0 million (9M 2011: EUR
83.0 million) reflecting the maintenance capital expenditure mode the
Company operated during the reporting period. Cash flow from investing
activities was a net outflow of EUR 17.6 million (9M 2011: net outflow
of EUR 81.8 million). Cash flow from financing activities was a net
outflow of EUR 29.8 million (9M 2011: net inflow of EUR 52.3 million)
driven by an early redemption of long-term borrowings and an increase in
cash dividend paid.

As of 30 September 2012, cash and cash equivalents amounted to EUR 30.2
million (31 December 2011: EUR 30.4 million) and net debt was EUR 29.4
million, down 41.7% from EUR 50.5 million as of 31 December 2011. C.A.T.
oil maintained healthy balance sheet with an equity ratio of 65.7% as of
30 September 2012 (31 December 2011: 62.3%).

Objectives reiterated for FY 2012

Based on the strong performance in the first nine months of the year,
C.A.T. oil reiterates its targets for FY 2012: The Company expects
revenues in the range of EUR 300 to 320 million and an EBITDA in the
range of EUR 67 to 73 million (based on a rouble-to-euro exchange rate
of 40).

Business expansion in 2013

In response to solid market fundamentals and customers′ growing demand
for the Company′s services, C.A.T. oil has decided to invest in
additional capacities: Compared to the 2012 level, the sidetracking and
fracturing operating capacities will be further expanded by 20% to 25%
and by 7% to 10% respectively in 2013. To this end, the Company has
increased its 2012 capital expenditures program by EUR 20.0 million to
EUR 50.0 million and budgeted the 2013 capital expenditures at EUR 45.0
million, of which EUR 20.0 million are intended for the new capacity and
the balance is due to maintenance capital expenditures.

Manfred Kastner added: 'One of C.A.T. oil′s key success factors is its
strong market position as well as the trusted and long-standing
relationship with customers. Although the European financial and
sovereign debt crisis impacts economies, particularly in Southern
Europe, we continue to operate in highly dynamic markets. There is a lot
of additional potential for our services in Russia and Kazakhstan that
is why we decided to further expand our business. We will prudently
invest in additional sidetracking and fracturing capacities by adding up
to 5 sidetrack drilling rigs and 1 fracturing fleet in the course of
2013. This allows us to further grow our business and to capitalize on
our longstanding activities and our strong position in Russia and
Kazakhstan.?

www.catoilag.com

¹ As of 30 September 2012 and 31 December 2011 respectively

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