Mr. James Horvath reports

LONESTAR WEST ANNOUNCES Q3 RESULTS

Lonestar West Inc. has released its financial results for the quarter ended Sept. 30, 2014.

Lonestar is pleased to announce that it achieved record revenues and EBITDAC (earnings before interest, taxes, depreciation and share-based payments) in the nine-month period ended Sept. 30, 2014.

On Nov. 12, 2013, Lonestar announced that it changed its financial year-end from June 30 to Dec. 31. This change in year-end allows the company to provide continuous disclosure information on a comparable basis with its industry peer group.

Highlights for the quarter ended Sept. 30, 2014, include:

• Revenues increased 56.8 per cent to $13,016,590 from $8,300,540 in the previous-year equivalent period.
• Gross margin increased to 26.1 per cent from 19.9 per cent in the previous-year equivalent quarter.
• Normalized EBITDAC increased 168 per cent to $2,442,928 from $911,634 in the previous-year equivalent quarter.
• Normalized EBITDAC per basic share increased 90.9 per cent to 8.4 cents from 4.4 cents in the previous-year equivalent quarter.
• Income before taxes was $1,028,002, an increase of $905,521 in comparison with the $122,481 income before taxes in the previous-year equivalent quarter.
• Net income for the quarter was $771,000, an increase of $679,019 in comparison with the $91,981 net income in the previous-year equivalent quarter.

Normalized EBITDAC rose by 168 per cent from the previous-year equivalent quarter, with a rise from $911,634 to $2,442,928. The increase in operating results can be credited to the significant improvement in gross margin as a result of improved operating efficiencies.

Normalized EBITDAC for the Canadian division rose 248.3 per cent from $299,393 to $1,042,731. In addition, normalized EBITDAC margin rose from 4.7 per cent to 11.7 per cent of Canadian revenues. The significant increase in results can be attributed to the improved operating efficiencies realized from infrastructure implemented in the Canadian division over the last four quarters.

The U.S. division continued to contribute positively during the quarter ended Sept. 30, 2014. Normalized EBITDAC for the U.S. division was $1,400,179, a 128.7-per-cent increase when compared with $612,241 in the comparable prior-year quarter. EBITDAC margin increased 3.2 per cent to 34 per cent from 30.8 per cent. The improvement was a result of operating efficiencies gained as management continues to build out its U.S. platform.

Highlights for the nine-month period ended Sept. 30, 2014, include:

• Revenues increased 46.4 per cent to $34,094,472 from $23,289,461 in the previous-year equivalent period.
• Gross margin increased to 23.6 per cent from 19.2 per cent in the previous-year equivalent period.
• Normalized EBITDAC increased 100.8 per cent to $5,376,304 from $2,677,237 in the previous-year equivalent period.
• Normalized EBITDAC per basic share increased 50.3 per cent to 21.5 cents from 14.3 cents in the previous-year equivalent period.
• Income before taxes was $1,963,948, a $1,354,974 increase in comparison with the $608,974 income before taxes in the previous-year equivalent period.
• Net earnings for the period were $1,472,960, a $1,067,457 increase in comparison with the $405,503 net earnings in the previous-year equivalent period.
• The company realized $242,114 in revenues in relation to a legal settlement in the company's favour.

Normalized EBITDAC rose to $5,376,301 from the previous-year equivalent period of $2,677,237. The significant growth can be credited to improved results from both the Canadian and U.S. divisions year over year.

Normalized EBITDAC for the Canadian division increased to 14.9 per cent from 10.2 per cent in the prior-year equivalent period. The improvement is a result of increased revenues, which rose 28.1 per cent to $26,071,817. The Canadian division added a total of 38 units to its fleet and two operational bases year over year.

Normalized EBITDAC for the U.S. division increased to 21.6 per cent from 20.5 per cent in the prior-year equivalent period. The improvement in normalized EBITDAC margins was a result of increased revenues, which rose 173.1 per cent to $8,019,655 for the nine-month period ended Sept. 30, 2014. The U.S. division added 28 units to its fleet and four operational bases year over year.

Lonestar is continuing to expand its fleet as part of its planned growth strategy. As of Sept. 30, 2014, the company had 127 units. Subsequent to quarter-end, the company added seven units, and anticipates adding a further 11 units by the end of the fourth quarter. The estimated total units of 145 for year-end compares with 68 units at the beginning of the year.

Subsequent to Sept. 30, 2014, the company continued its geographical expansion and opened field bases in Tulsa, Okla., Nashville, Tenn., and Toronto, Ont., bringing the total number of bases to 18 as of the date of this release. The company is continuing to evaluate viable locations to expand into and anticipates that it will add additional bases in the coming quarters.

"Lonestar is exceptionally pleased with both our organic growth and the contributions made by the Vamp Oilfield Inc. acquisition," commented James Horvath, president and chief executive officer of Lonestar. "The United States division has shown meaningful improvements and Vamp is having a significant impact on the Canadian division results."