Savanna Energy Services Announces Q4 2006 Results

Savanna Energy Services Corp. has closed out an eventful six months for the Company. Over that time period, Savanna has completed three key transactions that have turned the Company into a powerful North American drilling and well servicing force, and set the stage for future expansion.

1. Savanna and Western Lakota Energy Services Inc. ("Western Lakota") closed their merger effective August 25, 2006. This merger created a new oilfield services powerhouse capable of accessing over 90% of the wells drilled in Canada, and is well positioned to keep growing their core drilling and well servicing businesses, in addition to expanding into other strategically aligned services lines.

2. Savanna disposed of its wireline services division in a cash transaction for $208 Million, plus working capital adjustments, effective January 31, 2007. This transaction represented a tremendous financial metric on this division's asset and profitability base, and eliminated Savanna's debt.

3. On February 16, 2007, Savanna acquired an additional 20 service rigs and associated assets from a private Alberta company for an aggregate purchase price of $68 Million in combined cash and Savanna common shares, replacing over 60% of the EBITDA given up on the wireline sale for less than one-third of the cost.

These three transactions leave Savanna well positioned to continue enhancing its presence in the North American marketplace. In addition to its strong Canadian operations, the Company now has five drilling rigs, including one hybrid drilling rig, operating in the United States, and will be monitoring results in this market to assess potential expansion opportunities.

Despite the recent downturn in activity, Savanna remains committed to expanding its North American presence in all of its business lines, and given its now larger size and scale, in assessing potential opportunities outside North America as well.

Financial Highlights

Savanna is pleased to announce its financial and operating results for the three and twelve months ended December 31, 2006, with comparatives from the same periods of last year. The merger between Savanna and Western Lakota, completed on August 25, 2006, accounts for a substantial portion of the increase in revenues for the three months ended December 31, 2006, compared to the same period in 2005, with the expansion of Savanna's pre-existing fleet accounting for the remainder. Operating results include those of Savanna for the three and twelve months ending December 31, 2006 and of Western Lakota from the date of acquisition, August 25, 2006, to December 31, 2006.

The operating results for Ultraline Services Corporation, the Company's wireline division, have been excluded from the Company's results from continuing operations for 2006 and 2005 as a result of the sale of all of the outstanding shares of Ultraline in January, 2007. Accordingly, Ultraline's results have been shown as discontinued operations for both 2006 and 2005.

Operations in 2006 were influenced by a decrease in overall industry operating activity compared to 2005; however, a substantially larger equipment fleet and more favorable pricing allowed revenue and net earnings to increase substantially for both the three months and twelve months ending December 31, 2006. -- www.cnxmarketlink.com