Mr. Stephen Popadynetz reports

DIVESTCO REPORTS Q1 2013 RESULTS

Divestco Inc. has released its operating results for the three months ended March 31, 2013. Divestco generated net income for the first quarter of 2013 of $2.1-million (three cents per share -- basic and diluted) compared with $2.6-million (four cents per share -- basic and diluted) for the same period in 2012. EBITDA (earnings before interest, taxes, depreciation and amortization) was $5-million in first quarter 2013, a $2.5-million (33-per-cent) decrease from $7.5-million for the same period in 2012. The company generated funds from operations of $5.2-million (eight cents per share -- basic and diluted) for the first quarter of 2013, compared with $7.2-million (11 cents per share -- basic and diluted) for the same period in 2012. EBITDA and funds from operations do not include capital expenditures of $100,000 (March 31, 2012: $8.6-million), mainly comprising the costs related to new seismic programs.

During first quarter 2013, Divestco generated revenue of $11.6-million compared with $14.5-million in first quarter 2012, a decrease of $2.9-million (20 per cent). Revenue in the software and data segment increased by $100,000 (5 per cent) due to improved land software and log data revenue offset by lower geological and geophysical software revenue. Revenue in the seismic data segment decreased by $600,000 (8 per cent) due to a drop in seismic participation revenue as the company acquired more data in first quarter 2012 compared with first quarter 2013. This was offset by two large seismic data sales and fees associated with managing client surveys. Revenue in the services segment decreased by $2.4-million (43 per cent) with geomatics, processing and land management services all experiencing weaker demand as compared with first quarter 2012. Focus shifted from exploration to development activities through the industry in first quarter 2013 and this had an impact on demand for some of Divestco's services.

Operating expenses decreased by $300,000 (5 per cent) to $6.7-million in first quarter 2013 from $7-million in first quarter 2012. Salaries and wages were down $476,000 (10 per cent) due to lower head count and profit-share accrual. G&A (general and administrative) expenses were up $117,000 (5 per cent) as occupancy costs rose due to a scheduled increase in Divestco's lease rate offset by the company surrendering an additional floor of office space effective Jan. 1, 2013. Depreciation and amortization decreased by $2.6-million (49 per cent) mainly due to lower depreciation on seismic data as the company acquired a greater amount of data in first quarter 2012 as compared with first quarter 2013.

Liquidity and working capital

On May 9, 2013, the company announced it had closed a new senior credit facility of up to $11-million. The company also received $1-million in new shareholder loans just prior to the closing of the new facility. The proceeds were used to retire bank and subordinated debt totalling approximately $6-million. The facility has an expanded operating line ($8-million as compared with $5-million under its previous facility) based on receivables aged less than 90 days and $3-million in term debt as well as a financial covenant that is better suited to the company's business.

Management ensures that Divestco's credit facilities, combined with its working capital and funds from operations, will be sufficient in the short term and long term to meet planned growth and to finance future capital expenditures. Furthermore, the company has implemented significant cost cutting measures, which included surrendering a significant portion of its office space lease since 2011 and utilizing salary austerity measures during seasonally slow periods. In addition, the company evaluates all material capital expenditures, mainly seismic participation surveys, before commencement to ensure they meet appropriate financing levels.

Divestco ended first quarter 2013 with a working capital deficit of $1.7-million (Dec. 31, 2012: $7.5-million deficit), excluding deferred revenue of $4.2-million (Dec. 31, 2012 -- $2.4-million). The improvement in working capital from the end of 2012 was primarily due to a number of seismic data transactions completed in first quarter 2013 offset by an unpredictably slow quarter for the services segment. As a result of closing these seismic deals, the company has significantly reduced its payables since the end of 2012. The company's financed debt-to-equity ratio was 0.56:1 at March 31, 2013, compared with 0.64:1 at Dec. 31, 2012.

Operations update

During first quarter 2013, Divestco completed a 3-D seismic participation survey, covering an area of approximately 93 square kilometres. Total cost for the survey was approximately $3.5-million, with most of the cost incurred in fourth quarter 2012.

Stephen Popadynetz, chief executive officer, commented: "Returning to profitability in first quarter 2013 demonstrates that Divestco's efforts to control costs and focus on our assets are starting to pay dividends. Our first quarter seismic data library sales in 2013 were excellent and we are pleased with the validation of our seismic data inventory. As well, despite the softness in our services group, we are seeing increased activity levels which should result in improved results going forward. Our efforts to expand into international markets are expected to result in increased revenue in 2013. Additionally, our software group is rapidly developing new products which are about to hit the marketplace and we believe will lead to significant growth later this year. With all of these positive growth catalysts, we remain optimistic that Divestco can start to deliver additional profitable quarters to our shareholders."

                     FINANCIAL RESULTS 
         (In thousands, except per share amounts)                     

                              Three months ended March 31,        
                                          2013        2012

Revenue                                $11,618     $14,466
Operating expenses                       6,655       7,015
Other loss (income)                         (4)          1
EBITDA                                   4,967       7,450
Finance costs (income)                     270        (360)
Depreciation and amortization            2,613       5,165
Income before income taxes               2,084       2,645
Income tax expense                           -           -
Net income                               2,084       2,645
Per share -- basic and diluted            0.03        0.04
Funds from operations                    5,211       7,207
Per share -- basic and diluted            0.08        0.11

We seek Safe Harbor.