CPX Complete Production Services Complete Production Services Common Stock

Complete Production Services, Inc. (NYSE:CPX) today reported third quarter revenue of $229.9 million and an operating loss of $64.1 million, or $0.69 per diluted share. Third quarter results include pre-tax, non-cash charges of $41.0 million primarily related to fixed assets. Excluding these charges, EBITDA for the third quarter of 2009 was $27.2 million (“Modified EBITDA” as defined below) and net loss was $0.32 per diluted share.

The $41.0 million in charges resulted from an ongoing evaluation and rationalization of operations and assets due to the significant changes in market conditions which began in the fourth quarter of 2008. The contract drilling business accounted for approximately $37.6 million of the charges, of which $36.2 million related to an impairment analysis done in accordance with U.S. GAAP and $1.4 million resulted from asset disposals. The remaining $3.4 million occurred within the Completion and Production Services segment and was associated with asset disposals and inventory write-downs.

Revenue for the Completion and Production Services segment during the third quarter of 2009 was $198.0 million, an increase of $1.6 million from the prior quarter. Modified EBITDA for the segment was $34.8 million, which compares to $34.1 million in the prior quarter. Modified EBITDA margin for the segment during the third quarter was 17.6% versus 17.4% for the quarter ending June 30, 2009.

Third quarter Drilling Services segment revenue was $25.4 million, versus $24.7 million reported for the prior quarter. The segment reported a Modified EBITDA loss of $2.4 million compared to a positive contribution of $3.6 million in the second quarter of 2009. The segment was adversely impacted by a shift in mix, a decrease in utilization in the contract drilling business and an increase in bad debt expense of $3.5 million.

“Relative to the severe drop in activity earlier this year, market conditions have stabilized considerably,” commented Joe Winkler, Chairman and CEO. “We anticipate that the near-term will remain challenging, but are pleased with how our dedicated people have positioned the Company for the market recovery. Year-to-date we:

• significantly reduced our cost structure and capital expenditures;
• reduced our debt by $197.3 million, completely paying-down our revolving credit facility;
• amended our undrawn credit facility to provide greater certainty that we will have access to liquidity beyond the $76.1 million in cash we had as of September 30, 2009; and
• prudently protected and enhanced our core market positions.”

“While we do not anticipate an improvement prior to year-end, we are seeing indications of future increases in activity. Our focus has now shifted to preparing for the recovery which we believe will be led by horizontal, multi-stage well completions in our core basins,” concluded Mr. Winkler.

Complete Production Services, Inc. is a leading oilfield service provider focused on the completion and production phases of oil and gas wells. The company has established a significant presence in unconventional oil and gas plays in North America that it believes have the highest potential for long-term growth.

Complete will hold a conference call to discuss third quarter 2009 results on Tuesday, October 27, 2009 at 11:00 a.m. Eastern Time. To participate in the live conference call, dial 800-561-2601 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 10516712. The conference call will be available for replay beginning at 2:00 p.m. on October 27, 2009 and will be available until November 3, 2009. To access the conference call replay, please call 888-286-8010 and use the passcode: 45251817. The call is also being webcast and can be accessed at our website at www.completeproduction.com.

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risk and uncertainties. These forward-looking statements include statements regarding future market conditions, the Company’s business objectives in the fourth quarter of 2009 and the Company’s future success. Such statements are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the oilfield service industry and other risks described in the Company’s most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release.

Management evaluates the performance of Complete’s operating segments using non-GAAP financial measures, EBITDA, Adjusted EBITDA and Modified EBITDA. EBITDA is calculated as net income from continuing operations before net interest expense, taxes, depreciation and amortization. Adjusted EBITDA is calculated as EBITDA before impairment charges and minority interest. Modified EBITDA is calculated as Adjusted EBITDA before certain other non-cash charges including fixed asset and inventory write-downs and loss on non-monetary asset exchange. EBITDA, Adjusted EBITDA and Modified EBITDA are not substitutes for GAAP measures of earnings and cash flow. EBITDA, Adjusted EBITDA and Modified EBITDA are used in this press release because our management considers these measures to be important supplemental measures of performance and believes they are used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.

In the second quarter of 2009, management discovered accounting errors at one of its operations in the Rocky Mountain region, which occurred in prior years and impacted operating results for the years ended December 31, 2006, 2007 and 2008. The Company corrected these errors as of June 30, 2009 and made the required adjustments to reported results for certain prior periods, including the three and nine-month periods ended September 30, 2008. Accordingly, the financial information in this press release for the three and nine-month periods ended September 30, 2008 has been revised from its original presentation.

Complete Production Services, Inc. Consolidated Statements of Operations For the Quarters and Nine Months Ended September 30, 2009 and 2008 (in thousands, except per share data)       Quarter Ended Nine Months Ended September 30, September 30, Revised Revised 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) Revenue: Services $ 223,429 $ 481,073 $ 767,496 $ 1,307,069 Products   6,484     13,237     37,496     40,689   229,913 494,310 804,992 1,347,758   Cost of services 157,708 294,958 519,694 801,908 Cost of products 4,596 8,888 28,583 27,438 General and administrative expense 45,204 46,498 140,115 141,952 Depreciation and amortization 50,379 47,721 153,470 130,058 Fixed asset impairment loss   36,158     -     36,158     -     294,045     398,065     878,020     1,101,356  

Income (loss) from continuing operations before interest and taxes

(64,132 ) 96,245 (73,028 ) 246,402   Interest expense 13,987 14,052 42,344 44,252 Interest income (13 ) (85 ) (43 ) (242 )     -         Income (loss) from continuing operations before taxes (78,106 ) 82,278 (115,329 ) 202,392   Tax provision (benefit) (26,081 ) 29,804 (37,136 ) 71,822           Income (loss) from continuing operations $ (52,025 ) $ 52,474 $ (78,193 ) $ 130,570   Loss from discontinued operations (net of tax) - (153 ) - (4,859 )           Net income (loss) $ (52,025 ) $ 52,321   $ (78,193 ) $ 125,711     Basic earnings (loss) per share: Continuing operations $ (0.69 ) $ 0.71 $ (1.04 ) $ 1.78 Discontinued operations $ -   $ (0.00 ) $ -   $ (0.07 ) $ (0.69 ) $ 0.71   $ (1.04 ) $ 1.71     Diluted earnings (loss) per share: Continuing operations $ (0.69 ) $ 0.70 $ (1.04 ) $ 1.76 Discontinued operations $ -   $ (0.00 ) $ -   $ (0.07 ) $ (0.69 ) $ 0.70   $ (1.04 ) $ 1.69     Weighted average shares outstanding: Basic 75,200 73,935 75,045 73,225 Diluted 75,200 75,008 75,045 74,370 Complete Production Services, Inc. Condensed Consolidated Balance Sheets As of September 30, 2009 and December 31, 2008 (in thousands)     Revised September 30, December 31, 2009 2008 (unaudited) (unaudited) Assets: Cash $ 76,143 $ 18,500 Other current assets 262,095 420,877 Property, plant and equipment, net 980,706 1,166,686 Goodwill 341,512 341,592 Other long-term assets   35,382     39,698   Total assets   1,695,838     1,987,353     Liabilities and stockholders' equity: Current liabilities 99,907 136,440 Long-term debt 650,121 843,842 Long-term deferred tax liabilities   148,198     146,360   Total liabilities 898,226 1,126,642   Common stock 752 748 Treasury stock (328 ) (202 ) Additional paid-in capital 633,858 623,988 Retained earnings 145,482 223,675 Cumulative translation adjustment   17,848     12,502   Total stockholders' equity 797,612 860,711     Total liabilities and stockholders' equity $ 1,695,838   $ 1,987,353   Complete Production Services, Inc. Cash Flow Data For the Nine Months Ended September 30, 2009 (in thousands)       September 30, 2009 (unaudited) Cash flows provided by/(used for): Operating activities $ 270,063 Investing activities: Capital expenditures $ (29,094 ) Other investing activities $ 20,155 Financing activities $ (203,314 ) Complete Production Services, Inc. Consolidated Segment Information For the Quarters Ended September 30, 2009 and 2008, and June 30, 2009 and for the Nine Months Ended September 30, 2009 and 2008 (in thousands, except percentages)     Quarter Ended Revised September 30, September 30, June 30, 2009 2008 2009 (unaudited) (unaudited) (unaudited) Revenue: Completion and production services $ 198,014 $ 418,865 $ 196,441 Drilling services 25,415 62,208 24,709 Products   6,484     13,237     17,248   Total revenues $ 229,913   $ 494,310   $ 238,398     Adjusted EBITDA: (1) Completion and production services $ 31,396 $ 133,459 $ 31,424 Drilling services (3,757 ) 17,005 3,569 Products 1,791 3,387 2,085 Corporate and other   (7,025 )   (9,885 )   (8,578 ) Total Adjusted EBITDA $ 22,405   $ 143,966   $ 28,500     Adjusted EBITDA as a % of Revenue: Completion and production services 15.9 % 31.9 % 16.0 % Drilling services -14.8 % 27.3 % 14.4 % Products 27.6 % 25.6 % 12.1 % Total 9.7 % 29.1 % 12.0 %     Nine Months Ended Revised September 30, September 30, 2009 2008 (unaudited) (unaudited) Revenue: Completion and production services $ 681,981 $ 1,134,358 Drilling services 85,515 172,711 Products   37,496     40,689   Total revenues $ 804,992   $ 1,347,758     Adjusted EBITDA: (1) Completion and production services $ 129,044 $ 347,759 Drilling services 6,698 44,733 Products 6,427 10,209 Corporate and other   (25,569 )   (26,241 ) Total Adjusted EBITDA $ 116,600   $ 376,460     Adjusted EBITDA as a % of Revenue: Completion and production services 18.9 % 30.7 % Drilling services 7.8 % 25.9 % Products 17.1 % 25.1 % Total 14.5 % 27.9 %    

(1)Adjusted EBITDA is a non-GAAP measure used by management, as defined in the last paragraph of this press release.

  Footnote: The results 2008 exclude discontinued operations. Complete Production Services, Inc. Reconciliation of Adjusted EBITDA to the Most Comparable GAAP Measure For the Quarters Ended September 30, 2009 and 2008 and June 30, 2009 And the Nine Months Ended September 30, 2009 and 2008 (unaudited, in thousands)           Completion & Production Drilling Corporate & Services Services Products Other Total Quarter Ended September 30, 2009: Adjusted EBITDA $ 31,396 $ (3,757 ) $ 1,791 $ (7,025 ) $ 22,405 Depreciation & amortization 43,744 5,466 603 566 50,379 Fixed asset impairment loss   -     36,158     -   -     36,158   Operating income (loss) $ (12,348 ) $ (45,381 ) $ 1,188 $ (7,591 ) $ (64,132 )   Quarter Ended September 30, 2008 (Revised): Adjusted EBITDA $ 133,459 $ 17,005 $ 3,387 $ (9,885 ) $ 143,966 Depreciation & amortization   41,195     5,223     657   646     47,721   Operating income (loss) $ 92,264   $ 11,782   $ 2,730 $ (10,531 ) $ 96,245     Quarter Ended June 30, 2009: Adjusted EBITDA $ 31,424 $ 3,569 $ 2,085 $ (8,578 ) $ 28,500 Depreciation & amortization   44,723     5,488     624   567     51,402   Operating income (loss) $ (13,299 ) $ (1,919 ) $ 1,461 $ (9,145 ) $ (22,902 )   Nine Months Ended September 30, 2009: Adjusted EBITDA $ 129,044 $ 6,698 $ 6,427 $ (25,569 ) $ 116,600 Depreciation & amortization 133,393 16,502 1,861 1,714 153,470 Fixed asset impairment loss   -     36,158     -   -     36,158   Operating income (loss) $ (4,349 ) $ (45,962 ) $ 4,566 $ (27,283 ) $ (73,028 )   Nine Months Ended September 30, 2008 (Revised): Adjusted EBITDA $ 347,759 $ 44,733 $ 10,209 $ (26,241 ) $ 376,460 Depreciation & amortization   111,972     14,527     1,762   1,797     130,058   Operating income (loss) $ 235,787   $ 30,206   $ 8,447 $ (28,038 ) $ 246,402   Complete Production Services, Inc. Reconciliation of Modified EBITDA to Most Comparable GAAP Measure For the Quarters Ended September 30, 2009 and June 30, 2009 (unaudited, in thousands)           Completion & Production Drilling Corporate & Services Services Products Other Total Quarter Ended September 30, 2009: Modified EBITDA $ 34,830 $ (2,359 ) $ 1,791 $ (7,025 ) $ 27,237 3rd Qtr. 2009 fixed asset and inventory adjustments   3,434     1,398     -   -     4,832   Adjusted EBITDA 31,396 (3,757 ) 1,791 (7,025 ) 22,405 Depreciation and amortization 43,744 5,466 603 566 50,379 Fixed asset impairment charge   -     36,158     -   -     36,158   Operating income (loss) $ (12,348 ) $ (45,381 ) $ 1,188 $ (7,591 ) $ (64,132 )   Quarter Ended June 30, 2009: Modified EBITDA $ 34,095 $ 3,569 $ 2,085 $ (8,578 ) $ 31,171 2nd Qtr. 2009 fixed asset and inventory adjustments   2,671     -     -   -     2,671   Adjusted EBITDA 31,424 3,569 2,085 (8,578 ) 28,500 Depreciation and amortization   44,723     5,488     624   567     51,402   Operating income (loss) $ (13,299 ) $ (1,919 ) $ 1,461 $ (9,145 ) $ (22,902 ) Complete Production Services, Inc. Reconciliation of Earnings Per Share per GAAP Less Certain Non-cash Charges For the Quarter Ended September 30, 2009 (unaudited, in thousands except per share amounts)     Quarter Ended September 30, 2009 (unaudited)   Net loss from continuing operations, as reported $ (52,025 ) Add: Fixed asset impairment charge 36,158 Add: 3rd Qtr. 2009 fixed asset and inventory adjustments 4,832 Less: Tax benefit recognized from these non-cash charges   (13,199 ) Adjusted net loss $ (24,234 )   Diluted weighted average shares outstanding, as reported 75,200   Diluted loss per share:   As reported $ (0.69 ) As adjusted $ (0.32 )