Mr. Dean MacDonald reports

CLEARSTREAM ANNOUNCES SECOND QUARTER 2017 FINANCIAL RESULTS

Clearstream Energy Services Inc. has released its results for the three and six months ended June 30, 2017.

Second quarter 2017 highlights:

• Revenue for the second quarter of 2017 increased by $50.3-million or 82 per cent compared with the second quarter of 2016.
• Adjusted EBITDAS (net earnings determined in accordance with international financial reporting standards, before depreciation and amortization, interest expense, income tax expense (recovery), and stock-based compensation excluding income from equity investments, the gain on sale of assets held for sale, impairment of goodwill and intangible assets, restructuring costs, and gain on sale of property plant and equipment) for the second quarter of 2017 increased by $5.2-million or 338 per cent compared with the same period 2016.
• The year-over-year improvement in financial results was driven by a recovery of activity from the Fort McMurray fires that impacted the company's operations in the second quarter of 2016, as well as increased demand, improved operational performance and continued cost control initiatives.
• Increased demand was largely due to strong maintenance and facility turnaround activity by the company's customers during the second quarter of 2017.
• When adjusting for a one-time WCB (Workers' Compensation Board) surplus rebate that reduced selling, general and administrative costs in the second quarter of 2016, SG&A costs for the second quarter of 2017 decreased by 11 per cent compared with the same period in 2016.

Overview of financial r[esults

Revenues for the three months ended June 30, 2017, were $111.6-million and $189.2-million compared with $61.3-million and $130.0-million for the same periods in 2016, an increase of 82 per cent and 46 per cent. Demand for Clearstream's services increased for both reportable segments due largely to increased scope with existing customers, increased revenue from new customers and a recovery in demand in Fort McMurray caused by 2016 wildfires.

Gross profit for the three and six months ended June 30, 2017, was $11.1-million and $17.6-million compared with $5.5-million and $10.8-million for the same periods in 2016. Gross margins were 9.9 per cent and 9.3 per cent compared with 8.9 per cent and 8.3 per cent for the same periods in 2016. Gross margins improved on a year-over-year basis as cost-cutting initiatives executed in 2016 led to reductions in fixed indirect costs.

Selling, general and administrative costs for the three and six months ended June 30, 2017, were $4.4-million and $8.9-million compared with $4.0-million and $9.0-million in 2016. As a percentage of revenue, SG&A costs decreased over the comparative periods of 2016 due to cost-cutting initiatives implemented in 2016. On a comparative basis, SG&A costs in 2016 were reduced by a Workers Compensation Board surplus rebate that was received in the second quarter of 2016. A rebate has not yet been received in 2017 as the WCB program in Alberta is currently under review. When adjusting for this rebate, SG&A costs decreased by 11 per cent and 10 per cent for the three and six months ended June 30, 2017, respectively.

Outlook

Clearstream expects continued improvements to the financial results for the third quarter of 2017 compared with the third quarter of 2016. The improvements are expected to be a result of higher demand for services combined with lower year-over-year fixed costs. Higher demand is being driven by modest improvements in oil and gas prices, and increased spending on critical maintenance programs in 2017 compared with 2016. The cost control initiatives that were implemented in 2015 and 2016 are expected to be fully realized for the rest of 2017, consistent with the cost reductions that have occurred in 2017 year to date.

Despite expectations for improved financial results in 2017, Clearstream's service industry is expected to remain competitive for the rest of 2017. Maintenance spending continues to be cautiously managed by the company's customers, and new infrastructure projects within the Western Canadian oil and gas industry are not expected to increase until a substantial increase in commodity prices occurs. As a result of this challenging operating environment, Clearstream will continue to focus on cost control, customer retention, and process and efficiency improvements.

About Clearstream Energy Services Inc.

Clearstream is a fully integrated provider of upstream, mid-stream and refinery production services, which include facility maintenance and turnarounds, pipeline wear technology, facilities construction, welding and fabrication, and transportation to the energy and other industries in Western Canada.

                        CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
                          (in thousands of dollars, except per-share amounts)

                                                           Three months ended          Six months ended 
                                                                 June 30                   June 30
                                                            2017         2016         2017         2016

Revenue                                              $   111,559   $   61,335  $   189,248   $  129,975
Cost of revenue                                         (100,486)     (55,870)    (171,635)    (119,194)
Gross profit                                              11,073        5,465       17,613       10,781
Selling, general and administrative expenses              (4,395)      (4,002)      (8,923)      (8,955)
Share-based compensation                                    (350)           -         (659)           -
Amortization of intangible assets                           (864)        (901)      (1,727)      (1,802)
Depreciation                                              (1,358)      (1,586)      (2,589)      (3,134)
Income (loss) from equity investment                          93           80          130         (155)
Interest expense                                          (5,186)      (4,704)     (10,218)     (10,945)
Gain on sale of assets held for sale                        (515)                     (392)       1,114
Restructuring costs                                         (167)           -         (444)           -
Impairment of goodwill and intangible assets                   -            -            -       (8,700)
Gain on sale of property, plant and equipment                161          277        2,078          332
(Loss) before taxes                                       (1,508)      (5,371)      (5,131)     (21,464)
Income tax expense -- current                                 (2)         (20)          (2)         (19)
(Loss) from continuing operations                         (1,510)      (5,391)      (5,133)     (21,483)
(Loss) from discontinued operations (net of taxes)        (1,887)      (1,325)      (2,257)      (6,050)
Net (loss) and comprehensive (loss)                       (3,397)      (6,716)      (7,390)     (27,533)
(Loss) per share
Basic and diluted
Continuing operations                                      (0.01)       (0.05)       (0.05)       (0.20)
Discontinued operations                                    (0.02)       (0.01)       (0.02)       (0.06)
Net (loss)                                                 (0.03)       (0.06)       (0.07)       (0.25)