COLORADO SPRINGS, CO -- (Marketwire) -- 08/15/11 --


Selected Highlights:

  • Second quarter revenue up 34% to $4.5 million, adjusted EBITDA* improves to $80,000 from $19,000 in second quarter a year ago
  • Six-month revenue increases 49% to $13.7 million versus year-ago period; Six month adjusted EBITDA* up 133% to $2.8 million
  • Six-month operating cash flow up 227% to $3.6 million versus same period last year
  • New operation centers in Bakken and Niobrara regions scheduled to open in late Q3

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

"Our expansion into the Marcellus Shale region coupled with strong customer demand fueled solid period-over-period revenue growth and positive adjusted EBITDA* during our seasonally limited second quarter," said Rick Kasch, president and CFO. "Greater market penetration in our current basins drove revenue improvements across all our geographic territories. Moreover, each of our service platforms delivered increased revenue versus the same quarter last year."

"Much of our attention during the quarter was focused on launching our North Dakota and Wyoming operations centers, which will serve customers in the Bakken Shale and Niobrara Shale regions, respectively. The lengthy heating seasons in both of these regions should further accelerate our revenue growth and increasingly smooth out the seasonal pullbacks we historically have experienced in the second and third quarters. We expect both the North Dakota and Wyoming facilities will open during the latter half of the third quarter. In light of current customer demand, we believe these new facilities should fuel significant financial growth in the fourth quarter and throughout fiscal 2012."

Mike Herman, chairman and CEO, said, "The customer response to our expansion efforts has been very encouraging, and validates our aggressive push into the Bakken and Niobrara. We already have small, advance teams operating in both of these regions, which illustrates the strong demand for our service platform. We will soon have nine operations centers in various oil and gas basins in the northern half of the United States, where substantial investments are being made in unconventional oil and gas fields by majors, mid majors and independents.

"Our mission is to offer a broad energy service platform at all of our regional yard locations, and we are working to integrate our entire suite of services at each of our new sites. We also are actively exploring new service offerings, which if successfully introduced, could further mitigate our seasonal fluctuations and significantly accelerate our revenue growth. We believe the impact of our expansion initiatives will be evident in our fourth quarter, and we expect the second half of fiscal 2011 will be much improved versus the same period last year."

Second quarter resultsSecond quarter revenue increased 34% to $4.5 million from $3.3 million in the same quarter a year ago. From a service perspective, revenue from well enhancement operations, which includes frac heating, acidizing and hot oil services, increased 39% to $1.8 million versus last year's second quarter, while revenue from fluid management services, which consist of water hauling/disposal, and frac tank rentals, increased 31% to $2.3 million, versus the second quarter of 2010.

Gross margin increased to 15% from 12% in the second quarter of 2010. Operating loss was $1.2 million versus $953,000 last year. The increase was largely attributable to higher legal, accounting and consulting fees associated with the ENSERVCO's transition to public-company status following its July 2010 merger transaction. The Company also incurred additional non-cash expenses associated with stock option and warrant grants.

ENSERVCO reported a second quarter net loss of $850,000, or $0.04 per diluted share, versus a net loss of $784,000, or $0.05 per diluted share, in the second quarter last year. However, Adjusted EBITDA* improved to $80,000 from $19,000 in the comparable year-ago quarter.

Six-month ResultsRevenue through six months increased 49% to $13.7 million from $9.2 million in the same period last year. Gross margin improved to 30% from 23% in last year's six-month period. Operating income improved to $480,000, a positive swing of $1.2 million when compared with a loss from operations of $706,000 at the six-month mark last year. Net income was $35,000, or $0.00 per diluted share, a $710,000 improvement when compared with a net loss of $675,000, or $0.05 per diluted share, in the same period last year.

Adjusted EBITDA* through six months was $2.8 million, up 133% from adjusted EBITDA* of $1.2 million during the same period last year. Operating cash flow at the mid-year mark improved to $3.6 million, up 227% increase versus $1.1 million 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 Six Months Ended
                                June 30,                   June 30,
                       --------------------------  ------------------------
                           2011          2010          2011         2010
                       ------------  ------------  -----------  -----------
                        (Unaudited)   (Unaudited)  (Unaudited)  (Unaudited)

Revenues               $  4,470,679  $  3,345,640  $13,732,200  $ 9,220,210

Cost of Revenue           3,788,550     2,946,094    9,666,788    7,141,107
                       ------------  ------------  -----------  -----------

Gross Profit                682,129       399,546    4,065,412    2,079,103
                       ------------  ------------  -----------  -----------

Operating Expenses
  General and
   administrative
   expenses                 707,377       380,589    1,390,410      865,794
  Depreciation and
   amortization           1,128,865       971,935    2,194,539    1,919,716
                       ------------  ------------  -----------  -----------
      Total operating
       expenses           1,836,242     1,352,524    3,584,949    2,785,510
                       ------------  ------------  -----------  -----------

Income from Operations   (1,154,113)     (952,978)     480,463     (706,407)
                       ------------  ------------  -----------  -----------

Other (Expense) Income
  Interest expense         (171,965)     (169,371)    (352,276)    (359,552)
  Gain (loss) on
   disposals of
   equipment                      -             -      (44,286)       7,125
  Unrealized
   Derivative Loss                -       (13,078)           -            -
  Interest and other
   income                   (42,454)     (152,057)     (37,710)      83,364
                       ------------  ------------  -----------  -----------
      Total other
       (expense)
       income              (214,419)     (334,506)    (434,272)    (269,063)
                       ------------  ------------  -----------  -----------

Income Before Income
 Tax Expense             (1,368,532)   (1,287,484)      46,191     (975,470)

Income Tax (Expense)
 Benefit                    518,229       503,581      (11,406)     300,461
                       ------------  ------------  -----------  -----------

Net Income (Loss)      $   (850,303) $   (783,903) $    34,785  $  (675,009)
                       ============  ============  ===========  ===========

Other Comprehensive
 Income
  Unrealized losses on
   investment
   securities, net of
   tax                       (2,504)            -      (83,848)           -
                       ------------  ------------  -----------  -----------

Comprehensive Income   $   (852,807) $   (783,903) $   (49,063) $  (675,009)
                       ============  ============  ===========  ===========
Earnings per Common
 Share
  Income Per Common
   Share - Basic       $      (0.04) $      (0.05) $      0.00  $     (0.05)
  Income Per Common
   Share - Fully
   Diluted             $      (0.04) $      (0.05) $      0.00  $     (0.05)

Basic weighted average
 number of common
 shares outstanding      21,778,866    14,519,244   21,778,866   14,519,244
  Add: Dilutive shares
   assuming exercise
   of options and
   warrants                       0             0      651,502            0
                       ------------  ------------  -----------  -----------
Diluted weighted
 average number of
 common shares
 outstanding             21,778,866    14,519,244   22,430,368   14,519,244
Reconciliation from
 the Company's Net
 Income to Adjusted
 EBITDA*
ADJUSTED EBITDA
Net Income             $   (850,303) $   (783,903) $    34,785  $  (675,009)
Add Back:
  Interest Expense          171,965       169,371      352,276      359,552
  Provision for income
   taxes                   (518,229)     (503,581)      11,406     (300,461)
  Depreciation and
   amortization           1,128,865       971,935    2,194,539    1,919,716
                       ------------  ------------  -----------  -----------
    EBITDA             $    (67,702) $   (146,178) $ 2,593,006  $ 1,303,798
Add Back (Deduct):
  Stock-based
   compensation              59,184             -      108,865            -
  Warrants issued            46,353             -       46,353            -
  Loss (gain) on
   disposals of
   equipment                      -             -       44,286       (7,125)
  Unrealized
   derivative gain                -        13,078            -            -
  Interest and other
   income                    42,454       152,057       37,710      (83,364)
                       ------------  ------------  -----------  -----------
    ADJUSTED EBITDA    $     80,289  $     18,957  $ 2,830,220  $ 1,213,309
                       ============  ============  ===========  ===========
                                            ENSERVCO Consolidated Balance
                                                       Sheets

                                             June 30,        December 31,
                                         ----------------  ----------------
                                               2011              2010
                                         ----------------  ----------------
                                            (Unaudited)
                 ASSETS
Current Assets
Cash and cash equivalents                $      1,695,279  $      1,637,807
Accounts receivable, net                        2,855,600         4,101,331
Prepaid expenses and other current
 assets                                           794,960           681,307
Inventories                                       299,204           300,527
Income taxes receivable                                 -           634,941
Deferred tax asset                                 93,694            20,041
                                         ----------------  ----------------
      Total current assets                      5,738,737         7,375,954

Property and Equipment, net                    14,216,914        14,452,298
Non-Competition Agreements, net                   300,000           420,000
Goodwill                                          301,087           301,087
Other Assets                                       61,149            71,537
                                         ----------------  ----------------

TOTAL ASSETS                             $     20,617,887  $     22,620,876
                                         ================  ================

  LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $      1,537,370  $      2,066,353
Line of credit borrowings                               -         1,050,000
Current portion of long-term debt               4,054,876         3,107,122
                                         ----------------  ----------------
      Total current liabilities                 5,592,246         6,223,475
                                         ----------------  ----------------

Long-Term Liabilities
Subordinated debt - related party               1,700,000         1,700,000
Long-term debt, less current portion            7,141,258         8,657,675
Deferred income taxes, net                      1,472,786         1,434,282
                                         ----------------  ----------------
      Total long-term liabilities              10,314,044        11,791,957
                                         ----------------  ----------------
      Total liabilities                        15,906,290        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 March 31, 2011 and
     December 31, 2010                            108,894           108,894
Additional paid-in-capital                      5,645,041         5,489,823
Retained deficit                               (1,115,228)       (1,150,011)
Accumulated other comprehensive income -
 investment securities                             72,890           156,738
                                         ----------------  ----------------
      Total stockholders' equity                4,711,597         4,605,444
                                         ----------------  ----------------

TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                                  $     20,617,887  $     22,620,876
                                         ================  ================

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