Mr. Ken Berg reports

DIVERGENT ENERGY SERVICES ANNOUNCES THE RELEASE OF 2023 SECOND QUARTER RESULTS

Divergent Energy Services Corp. has released its financial results for the three and six months ended June 30, 2023. All amounts are in thousands of U.S. dollars unless otherwise noted.

Highlights for the quarter:

• The company posted its highest ever quarterly revenue from oil-related product sales and service.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $67,000 in the second quarter of 2022 represents the 11th consecutive quarter of positive adjusted EBITDA.
• Despite slowdowns in customer activity, the company continues to maintain a strong balance sheet.

Industry outlook

Global demand for oil remains strong as the world's major economies continue to rely on petroleum products in everyday life. Macroeconomic factors including continued inflationary pressures, extended voluntary production cuts by Saudi Arabia, continuing geopolitical tensions creating concerns for security of supply and record low North American oil inventory storage levels all point to continued strong oil pricing well into 2024. At these price levels, the company anticipates generally robust oil field service activity levels as customers remain very positive on their current spending plans for 2023. The company continues to add new customers, and as such, a capital investment in oil field equipment was made in the third quarter of 2023 to increase the company's capacity to support a growing customer base.

While natural gas prices trended down and flattened out through the first quarter of 2023, the company's primary customer remained busy through the first quarter of 2023. However, during the second quarter of 2023, this same customer significantly reduced its activity levels, in part due to lower gas prices, but primarily due to two of its primary offtake pipelines being taken off-line for repairs and recertification, which resulted in reduced revenue for the quarter. The repairs and recertification were completed midway through the third quarter of 2023. The company anticipates continued base level activity throughout the third quarter of 2023 while the customer prepares to ramp back up its activity levels as the CBM reservoir requires constant dewatering to maintain the integrity and value of the field. Market analysts are reporting that gas prices should improve in the second half of 2023 due to reduced gas-targeted drilling over the past year. As such, the company expects to see increased activity levels starting in the fourth quarter of 2023.

Over all, the demand for energy services and the ability for the sector to improve over the next few years are seen as highly likely. The structural shortfall in global energy supply will be difficult for the industry to overcome for some time. The company remains confident in the long-term viability of the oil and gas basins within its service region. These basins have significant future development opportunities that the company is well positioned to address. In this environment, the company intends to seek and evaluate strategic growth opportunities to both diversify its product offerings and drive continuous margin improvements.

Financial and operating highlights -- six months ended June 30, 2023

Select financial information for the three and six months ended June 30, 2023, has been summarized in the attached table. The table contains results for 2023 and 2022. Refer to the company's audited condensed consolidated financial statements and related management's discussion and analysis for a full description.

The company's complete set of June 30, 2023, quarter-end filings has been filed on the SEDAR+ website and is also available on the company's website.

About Divergent Energy Services Corp.

Headquartered in Calgary, Alta., Divergent provides fluid management products and services for the water, gas and oil industries through its wholly owned subsidiary Extreme Pump Solutions LLC.

We seek Safe Harbor.