DENVER, CO -- (Marketwire) -- 11/14/11 -- ENSERVCO Corporation (OTCQB: ENSV) (PINKSHEETS: ENSV)

Selected Highlights:

  • Third quarter revenue increases to $4.5 million from $3.4 million in Q3 last year
  • Nine-month revenue improves to $18.3 million from $12.6 million in year-ago period
  • Year-to-date adjusted EBITDA* up 164% to $2.7 million versus $1.0 million in same period last year
  • Nine-month operating cash flow at $3.4 million versus cash used in operating activities of $391,000 at nine-month mark last year
  • New operation centers open in Bakken and Niobrara regions

ENSERVCO Corporation (OTCQB: ENSV), a provider of well-site services to the domestic onshore conventional and unconventional oil and gas industries, today reported financial results for its third quarter and nine-month periods ended September 30, 2011.

"The third quarter was marked by strong revenue growth in all three of our service segments and in every geographic region we serve," said Rick Kasch, president and CFO. "In addition, we used what is traditionally a seasonally soft quarter to execute a major expansion of our service territory. Our new operation centers serving the Bakken and Niobrara shale formations opened late in the third quarter and have given us a solid foothold in two of the country's most active unconventional oil and gas fields.

"We are preparing to enter our peak season, which we expect will be in full swing during the coming weeks as cold weather sets in across the northern United States," Kasch added. "We are expanding the operations teams at our new facilities in Killdeer, North Dakota and Cheyenne, Wyoming, and are fabricating several new hot oiling and frac heating trucks, which we anticipate will enter our fleet during the fourth quarter. Our operations in the Marcellus Shale region have already experienced an uptick in seasonal demand, with several customers requesting heating services approximately 30 days earlier than last season."

Kasch said management continues to evaluate a range of new service offerings that could augment the Company's revenue stream and help smooth the current seasonal fluctuations in demand. "Exploration and production companies in many of the regions we serve are facing a significant shortage of various oilfield services. Our long-range objective is to play a larger role in addressing this unsatisfied demand."

Third quarter resultsThird quarter revenue advanced 33% to $4.5 million from $3.4 million in the same quarter a year ago. At the service level, revenue from well enhancement operations, which includes frac heating, acidizing and hot oil services, increased 59% to $1.5 million versus $970,000 the same quarter last year. Increased demand for acidizing services and early-season hot oiling work in the Rocky Mountain region drove the improvement. Revenue from fluid management services, which consist of water hauling/disposal and frac tank rentals, increased 17% to $2.5 million versus $2.1 million in the third quarter of 2010. Well-site construction and roustabout revenue increased 60% to $512,000 from $321,000 in the same quarter a year ago.

Gross margin, which is generally lower during the third quarter than the Company's annualized rate, was flat at 13% versus last year's third quarter. The Company's operating loss was $1.7 million versus $1.6 million in the year-ago third quarter. The increase was attributable to higher labor costs associated with the expansion of the Company's corporate, administrative and operations staff; expenses incurred in opening the Company's new North Dakota and Wyoming facilities, and costs associated with the relocation of ENSERVCO's corporate headquarters to Denver. The Company also incurred additional non-cash expenses associated with stock option and warrant grants.

Third quarter net loss was $1.1 million, or $0.05 per diluted share, versus a net loss of $1.0 million, or $0.05 per diluted share, in the third quarter last year. Adjusted EBITDA* was a negative $134,000 versus a negative $212,000 in the same period a year ago.

Nine-month ResultsRevenue through nine months increased 45% to $18.3 million from $12.6 million in the same period last year. Gross margin improved to 25% from 20% in last year's nine-month period. Operating loss declined to $1.2 million from an operating loss of $2.3 million at the nine-month mark last year. Net loss was $1.1 million, or $0.5 per diluted share, a $587,000 improvement when compared with a net loss of $1.7 million, or $0.10 per diluted share, in the same period last year.

Adjusted EBITDA* through nine months was $2.7 million, up 164% from adjusted EBITDA* of $1.0 million during the same period last year. Operating cash flow at the nine-month mark improved to $3.4 million versus cash used in operating activities of $391,000 during the same period last year.

About ENSERVCOThrough its various operating subsidiaries, ENSERVCO has rapidly emerged as one of the energy service industry's leading providers of hot oiling, acidizing, frac heating and fluid management services. The Company owns and operates a fleet of more than 225 specialized trucks, trailers, frac tanks and related well-site equipment. ENSERVCO operates in Colorado, Kansas, New Mexico, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, Wyoming and West Virginia. ENSERVCO became a public company in July 2010 as a result of a merger transaction involving Aspen Exploration Corporation. Additional information about the Company is available at www.enservco.com.

*Note on non-GAAP Financial Measures This press release and the accompanying tables include a discussion of EBITDA and Adjusted EBITDA, which are non-GAAP financial measures provided as a complement to the results provided in accordance with generally accepted accounting principles ("GAAP"). The term "EBITDA" refers to a financial measure that we define as earnings plus or minus net interest plus taxes, depreciation and amortization. Adjusted EBITDA excludes from EBITDA stock-based compensation and, when appropriate, other items that management does not utilize in assessing ENSERVCO's operating performance (as further described in the attached financial schedules). None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure. We have reconciled EBITDA to GAAP net income in the following table.

We intend to continue to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting.

Cautionary Note Regarding Forward-Looking StatementsThis news release contains information that is "forward-looking" in that it describes events and conditions ENSERVCO reasonably expects to occur in the future. Expectations for the future performance of ENSERVCO are dependent upon a number of factors, and there can be no assurance that ENSERVCO will achieve the results as contemplated herein. Certain statements contained in this release using the terms "may," "expects to," and other terms denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond ENSERVCO's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in a Form 10-K filed on March 28, 2011. It is important that each person reviewing this release understand the significant risks attendant to the operations of ENSERVCO. ENSERVCO disclaims any obligation to update any forward-looking statement made herein.

                          ENSERVCO Consolidated Statements of Operations
                     For the Three Months Ended   For the Nine Months Ended
                            September 30,               September 30,
                     --------------------------- ---------------------------
                         2011          2010          2011          2010
                     ------------- ------------- ------------- -------------
                      (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)

Revenues             $  4,532,274  $  3,406,290  $ 18,265,614  $ 12,626,500

Cost of Revenue         3,952,923     2,960,385    13,619,711    10,102,887
                     ------------- ------------- ------------- -------------

Gross Profit              579,351       445,905     4,645,903     2,523,613
                     ------------- ------------- ------------- -------------

Operating Expenses
  General and
   administrative
   expenses             1,058,602     1,031,883     2,450,153     1,878,011
  Depreciation and
   amortization         1,215,524       993,977     3,410,063     2,918,670
                     ------------- ------------- ------------- -------------
      Total
       operating
       expenses         2,274,126     2,025,860     5,860,216     4,796,681
                     ------------- ------------- ------------- -------------

Income from
 Operations            (1,694,775)   (1,579,955)   (1,214,313)   (2,273,068)
                     ------------- ------------- ------------- -------------

Other (Expense)
 Income
  Interest expense       (161,642)     (177,553)     (513,918)     (551,794)
  Gain (loss) on
   disposals of
   equipment                    -       (19,200)      (44,286)      (12,075)
  Interest and other
   income                    (726)      108,996       (38,436)      192,360
                     ------------- ------------- ------------- -------------
      Total other
       (expense)
       income            (162,368)      (87,757)     (596,640)     (371,509)
                     ------------- ------------- ------------- -------------

Income Before Income
 Tax Expense           (1,857,143)   (1,667,712)   (1,810,953)   (2,644,577)

Income Tax (Expense)
 Benefit                  726,719       661,913       715,313       962,374
                     ------------- ------------- ------------- -------------

Net Income (Loss)    $ (1,130,424) $ (1,005,799) $ (1,095,640) $ (1,682,203)
                     ============= ============= ============= =============

Other Comprehensive
 Income
  Unrealized losses
   on investment
   securities, net
   of tax                 (46,451)       37,168      (130,300)     (484,296)
                     ------------- ------------- ------------- -------------

Comprehensive Income $ (1,176,875) $   (968,631) $ (1,225,940) $ (2,166,499)
                     ============= ============= ============= =============
Earnings per Common
 Share
  Income Per Common
   Share - Basic     $      (0.05) $      (0.05) $      (0.05) $      (0.10)
  Income Per Common
   Share - Fully
   Diluted           $      (0.05) $      (0.05) $      (0.05) $      (0.10)

Basic weighted
 average number of
 common shares
 outstanding           21,778,866    19,648,325    21,778,866    16,247,725
  Add: Dilutive
   shares assuming
   exercise of
   options and
   warrants                     0             0             0             0
                     ------------- ------------- ------------- -------------
Diluted weighted
 average number of
 common shares
 outstanding           21,778,866    19,648,325    21,778,866    16,247,725
ADJUSTED EBITDA
Net Income           $ (1,130,424) $ (1,005,799) $ (1,095,640) $ (1,682,203)
Add Back:
  Interest Expense        161,642       177,553       513,918       551,794
  Provision for
   income taxes          (726,719)     (661,913)     (715,313)     (962,374)
  Depreciation and
   amortization         1,215,524       993,977     3,410,063     2,918,670
                     ------------- ------------- ------------- -------------
    EBITDA           $   (479,977) $   (496,182) $  2,113,028  $    825,887
Add Back (Deduct):
  Stock-based
   compensation           345,219       292,596       454,084       292,596
  Warrants issued               -        81,771        46,353        81,771
  Loss (gain) on
   disposals of
   equipment                    -        19,200        44,286        12,075
  Interest and other
   income                     726      (108,996)       38,436      (192,360)
                     ------------- ------------- ------------- -------------
    ADJUSTED EBITDA  $   (134,032) $   (211,611) $  2,696,187  $  1,019,969
                     ============= ============= ============= =============

                                               ENSERVCO Consolidated Balance
                                                          Sheets
                                               September 30,   December 31,
                                               -------------- --------------
                                                    2011           2010
                                               -------------- --------------
                                                (Unaudited)
                    ASSETS
Current Assets
Cash and cash equivalents                      $     525,801  $   1,637,807
Accounts receivable, net                           3,249,885      4,101,331
Marketable securities                                154,212        365,786
Prepaid expenses and other current assets            651,593        315,521
Inventories                                          344,537        300,527
Income taxes receivable                                    0        634,941
Deferred tax asset                                   109,233         20,041
                                               -------------- --------------
      Total current assets                         5,035,261      7,375,954

Property and Equipment, net                       15,477,129     14,452,298
Non-Competition Agreements, net                      240,000        420,000
Goodwill                                             301,087        301,087
Other Assets                                          58,503         71,537
                                               -------------- --------------

TOTAL ASSETS                                   $  21,111,980  $  22,620,876
                                               ============== ==============

     LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities       $   2,195,287  $   2,066,353
Line of credit borrowings                          1,314,358      1,050,000
Current portion of long-term debt                  3,771,842      3,107,122
                                               -------------- --------------
      Total current liabilities                    7,281,487      6,223,475
                                               -------------- --------------

Long-Term Liabilities
Deferred rent payable                                  5,511              -
Subordinated debt - related party                  1,477,760      1,700,000
Long-term debt, less current portion               7,735,372      8,657,675
Deferred income taxes, net                           731,908      1,434,282
                                               -------------- --------------
      Total long-term liabilities                  9,950,551     11,791,957
                                               -------------- --------------
      Total liabilities                           17,232,038     18,015,432
                                               -------------- --------------
Stockholders' Equity
  Common and preferred stock. $.005 par value
    Authorized: 100,000,000 common shares and
     10,000,000 preferred shares
    Issued: 21,882,466 common shares and -0-
     preferred shares
    Treasury Stock: 103,600 common shares
    Issued and outstanding: 21,778,866 common
     shares and -0- preferred shares at
     September 30, 2011 and December 31, 2010        108,894        108,894
Additional paid-in-capital                         5,990,260      5,489,823
Retained deficit                                  (2,245,651)    (1,150,011)
Accumulated other comprehensive income -
 investment securities                                26,439        156,738
                                               -------------- --------------
      Total stockholders' equity                   3,879,942      4,605,444
                                               -------------- --------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $  21,111,980  $  22,620,876
                                               ============== ==============

CONTACT:Geoff High
Pfeiffer High Investor Relations, Inc.
303-393-7044