IROC ENERGY SERVICES CORP. ANNOUNCES INCREASED NET INCOME AND FILING OF QUARTERLY FINANCIAL STATEMENTS

CALGARY, Nov. 23 /CNW/ - IROC Energy Services Corp. ("IROC" or the "Corporation") (TSX Venture Exchange: "ISC") is pleased to present a summary of its operating and financial results for the three and nine month periods ended September 30, 2010.  For a complete copy of IROC's quarterly financial statements and management's discussion and analysis ("MD&A") please visit www.sedar.com.

HIGHLIGHTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010:

• Total revenue from continuing operations increased 61% to $16.4 million for the three months ended September 30, 2010 as compared to $10.2 million in the comparable period of the prior year.
  
  
• Gross margin from continuing operations increased 52% to $5.0 million for the three months ended September 30, 2010 as compared to $3.3 million in the comparable period of the prior year.
  
  
• EBITDAS from continuing operations increased 116% to $3.0 million for the three months ended September 30, 2010 as compared to $1.4 million in the comparable period of the prior year.
  
  
• Net income from continuing operations increased to $437 thousand for the three months ended September 30, 2010 as compared to a loss of $9.3 million in the comparable period of the prior year.
  
  
• Expanded our rental product lines to include coil tubing and related well servicing equipment through the acquisition of the rental assets of Trust Energy Services Corp.

HIGHLIGHTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010:

• Total revenue from continuing operations increased 30% to $43.5 million for the nine months ended September 30, 2010 as compared to $33.5 million in the comparable period of the prior year.
  
  
• Gross margin from continuing operations increased 27% to $13.8 million for the nine months ended September 30, 2010 as compared to $10.8 million in the comparable period of the prior year.
  
  
• EBITDAS from continuing operations increased 61% to $7.3 million for the nine months ended September 30, 2010 as compared to $4.5 million in the comparable period of the prior year.
  
  
• Net loss from continuing operations decreased to $94 thousand for the nine months ended September 30, 2010 as compared to a loss of $10.5 million in the comparable period of the prior year.

OPERATIONS

IROC's continuing operations are reported in three segments; the Drilling and Production Services segment, the Technology Services segment and Corporate Services.  The following is a discussion of the reporting segments in which IROC operates.

DRILLING AND PRODUCTION SERVICES

The Drilling and Production Services segment provides services and rental equipment to oil and gas exploration, development and production companies with most of our customers and operations being located in western Canada, in the provinces of Alberta and Saskatchewan. 

The Drilling and Production Services segment consists of two divisions:

Eagle Well Servicing ("Eagle") contracts service rigs to oil and gas companies to perform various completion, work-over and maintenance services on oil and natural gas wells.  Eagle has offices and equipment in Red Deer, Grande Prairie and Lloydminster in Alberta and an office and equipment in Estevan, Saskatchewan with equipment being used in those geographic areas. 

Aero Rental Services ("Aero") provides rental equipment for surface pressure control in drilling and work-over operations and tubular handling equipment used for the work over, re-entry and completion operations.  Aero has an office in Red Deer, Alberta with equipment being rented for use primarily in Alberta.  Aero's results are directly affected by the level of new well drilling activity.

					Three months ended
					September 30, 2010			June 30, 2010			March 31, 2010		December 31, 2009
Eagle Well Servicing:
	Number of service rigs				35			35			36		36
	Service rig utilization				57%			33%			55%		49%
Aero Rental Services:
	Gross margin $000's				735			233			467		455
	Book value of rental equipment $000's				8,733			7,379			7,005		6,868
Commodity prices:
	NYMEX crude oil $US/bbl				76.20			78.03			78.72		76.19
	AECO Monthly index natural gas $CAD/GJ				3.57			3.66			5.08		4.01

					Three months ended
					September 30, 2009			June 30, 2009			March 31, 2009		December 31, 2008
Eagle Well Servicing:
	Number of service rigs				36			36			34		32
	Service rig utilization				34%			27%			46%		54%
Aero Rental Services:
	Gross margin $000's				311			60			368		366
	Book value of rental equipment $000's				6,743			6,873			5,076		5,254
Commodity prices:
	NYMEX crude oil $US/bbl				68.30			59.62			43.08		58.73
	AECO Monthly index natural gas $CAD/GJ				2.87			3.47			5.34		6.43

Eagle currently has a fleet of 35 service rigs with our equipment amongst the newest in the industry.  All Eagle's service rigs are internally guyed with no requirement for external anchors.  This reduces set up time and corresponding costs when compared to anchored rigs.  During the second quarter we ceased marketing of our oldest service rig and have removed it from the number of active service rigs for utilization calculation purposes.

Commodity prices are the main activity driver as the Corporation's customers' exploration and development programs are directly impacted by oil and natural gas prices.  Oil and gas producers spend capital on new wells and service operations when they are economic within the context of current and forecasted commodity prices.  Year over year, crude oil prices have been stronger in first nine months of this year and have been following a general trend of strengthening since the fourth quarter of 2008.  Natural gas prices have experienced less of a recovery than crude oil and remain relatively weak in comparison to historic price levels over the past five years.  At current price levels, natural gas development is focused on resource type development projects and liquids rich reservoirs as much conventional shallow gas is no longer economic.

Service rig utilization, as measured by IROC's internal methodology, increased in the quarter to 57%, as compared to 34% in the comparative period of last year.  Our utilization percentage increased by 24% as compared to the second quarter as activity levels recovered from the slowdown in the second quarter due to normal seasonality caused by spring break up.  Year to date, our utilization percentage has increased 13% averaging 48% in the current year to date period as compared to 35% in the prior year period.

On July 16, 2010 IROC purchased all of the rental assets, rental contracts, and most of the business assets of Trust Energy Services Corp. ("Trust").  Trust was a privately owned Alberta based oilfield rental company, specializing in a complete line of coil tubing and well servicing equipment rentals.  The Trust assets were acquired to complement Aero Rental Services existing rental assets and to expand the products and services offered.  The Trust rental location was closed and all equipment was transferred and integrated into IROC's existing rental asset inventory immediately after the purchase.  As part of the asset purchase, Trust's manager has joined Aero Rentals in a management position.

TECHNOLOGY SERVICES

The Technology Services segment is comprised solely of our Canada Tech division.  Canada Tech develops, manufactures and sells or rents a wide line of tools and systems that measure pressures, temperatures and other attributes in the downhole and surface environment of oil and gas wells.

Canada Tech continues to make progress in the sales of products that measure temperature and pressure in Steam Assisted Gravity Drainage ("SAGD") applications in Alberta's heavy oil sector.  This is a market segment with large growth potential as this sector has been growing and has recently surpassed natural gas in the dollar amount of Crown royalties being paid to the Alberta Government for the first time.

Canada Tech's customers require data that is reliable, consistent and accurate.  Our products utilize new and superior technology enabling our gauges and systems to operate in higher temperatures and more challenging environments.  Canada Tech's competitive advantage is the ability to look at each well individually and adapt a system to match the needs of the customer within the well parameters.  Due to the custom nature of much of Canada Tech's sales, much of the manufacturing is done on a build to order basis and a significant portion of revenues are on a project basis.

There is continued progress in the permanent monitoring market because of our ability to adapt systems to the customer's needs.  This is evident through the SAGD and shale gas projects we are involved in where we are deploying new Hybrid technology which measures temperatures and pressures up to 225°C.  In addition, we have developed permanent technology for measuring temperature up to 260°C.  For customers with multiple zones in a well, we have installed permanent multi gauge systems with up to six gauges per well.  We anticipate growth in SAGD and multiple zone applications, both in Western Canada and internationally where permanent monitoring technology has become more accepted and is ready to be deployed.

In memory tools we continue to pursue sales into international markets.  Although sales are marginally reduced over the prior year period, we have executed additional customer contracts and anticipate continued growth over the coming year.  In addition, Canada Tech has developed increased memory capability in both Piezo gauges and Quartz gauges to allow for additional data storage.

Canada Tech differs from our other divisions in that the capital requirement is smaller and the value of the division is contained in its patents and proprietary technology.  A significant portion of Canada Tech's costs are fixed and as such increased sales volumes have a magnified effect on the EBITDAS of IROC.  Financial performance in the quarter fell short of expectations due to permanent installation projects being delayed or cancelled.  While these results are disappointing, we continue to gain market acceptance with our high temperature permanent systems with installations scheduled with two additional SAGD customers in the fourth quarter of this year.

CORPORATE SERVICES

IROC's non-operating segment, Corporate Services, captures general and administrative expenses associated with supporting each of the reporting segments operations noted above, plus costs associated with being a public company.  Also, included in Corporate Services is interest expense for debt servicing and income tax expense.

FINANCIAL RESULTS AND SELECTED FINANCIAL INFORMATION

					Three months ended
$ 000's except number of shares and per share amounts					September 30, 2010			June 30, 2010			March 31, 2010		December 31, 2009
Revenue:
	Eagle Well Servicing				12,241			6,642			11,731		10,537
	Aero Rental Services				1,801			894			1,776		1,501
	Total drilling & production services				14,042			7,536			13,507		12,038
	Technology services				2,402			3,289			2,741		3,445
Total revenue					16,444			10,825			16,248		15,483
Operating costs:
	Eagle Well Servicing				8,234			5,106			7,570		6,982
	Aero Rental Services				1,066			661			1,309		1,047
	Total drilling & production services				9,300			5,767			8,879		8,029
	Technology services				2,108			1,897			1,751		2,356
Total operating costs					11,408			7,664			10,630		10,385
Gross margin(1)
	Eagle Well Servicing				4,007			1,536			4,162		3,555
	Aero Rental Services				735			233			467		455
	Total drilling & production services				4,742			1,769			4,629		4,010
	Technology services				294			1,392			989		1,088
Total gross margin					5,036			3,161			5,618		5,098
Gross margin %(1):
	Eagle Well Servicing				33%			23%			35%		34%
	Aero Rental Services				41%			26%			26%		30%
	Total drilling & production services				34%			23%			34%		33%
	Technology services				12%			42%			36%		32%
Total gross margin %					31%			29%			35%		33%
EBITDAS(1):
	Eagle Well Servicing				3,403			1,079			3,566		3,057
	Aero Rental Services				524			101			316		331
	Total drilling & production services				3,927			1,180			3,882		3,388
	Technology services				(204)			765			475		512
	Corporate				(747)			(970)			(979)		(927)
Total EBITDAS					2,976			975			3,378		2,973
General and administrative					2,060			2,186			2,240		2,125
Depreciation and amortization					2,268			2,003			1,991		2,392
Interest expense net of interest income					293			265			360		446
Stock based compensation					98			129			178		74
Provision for current and future income taxes					187			(278)			235		380
Loss (gain) on foreign exchange					(2)			(88)			97		43
Net income (loss) from continuing operations					437			(1,055)			524		(395)
Net income (loss)					437			(1,055)			524		(481)
Net income (loss) per common share from continuing operations:
	- Basic				$0.01			$(0.02)			$0.01		$(0.01)
	- Diluted				$0.01			$(0.02)			$0.01		$(0.01)
Net income (loss) per common share:
	- Basic				$0.01			$(0.02)			$0.01		$(0.01)
	- Diluted				$0.01			$(0.02)			$0.01		$(0.01)
Weighted average common shares outstanding:
	- Basic				43,502,346			43,604,911			43,576,971		43,565,754
	- Diluted				43,523,763			43,604,911			43,576,971		43,565,754
(1) See Non-GAAP Measures

					Three months ended
$ 000's except number of shares and per share amounts					September 30, 2009			June 30, 2009			March 31, 2009		December 31, 2008
Revenue:
	Eagle Well Servicing				7,166			5,349			10,444		12,238
	Aero Rental Services				1,013			900			1,362		1,367
	Total drilling & production services				8,179			6,249			11,806		13,605
	Technology services				2,052			3,053			2,201		3,398
Total revenue					10,231			9,302			14,007		17,003
Operating costs:
	Eagle Well Servicing				4,652			3,919			6,544		7,117
	Aero Rental Services				702			840			994		1,001
	Total drilling & production services				5,354			4,759			7,538		8,118
	Technology services				1,554			1,808			1,688		2,573
Total operating costs					6,908			6,567			9,226		10,691
Gross margin(1)
	Eagle Well Servicing				2,514			1,430			3,900		5,121
	Aero Rental Services				311			60			368		366
	Total drilling & production services				2,825			1,490			4,268		5,487
	Technology services				498			1,245			513		825
Total gross margin					3,323			2,735			4,781		6,312
Gross margin %(1):
	Eagle Well Servicing				35%			27%			37%		42%
	Aero Rental Services				31%			7%			27%		27%
	Total drilling & production services				34%			24%			36%		40%
	Technology services				24%			41%			23%		24%
Total gross margin %					32%			29%			34%		37%
EBITDAS(1):
	Eagle Well Servicing				2,129			997			3,434		4,397
	Aero Rental Services				206			(53)			261		241
	Total drilling & production services				2,335			944			3,695		4,638
	Technology services				29			556			(165)		159
	Corporate				(985)			(917)			(950)		(895)
Total EBITDAS					1,379			583			2580		3,902
General and administrative					1,944			2,152			2,201		2,410
Depreciation and amortization					2,073			1,978			2,011		1,791
Interest expense net of interest income					308			205			273		512
Stock based compensation					64			92			110		67
Provision for current and future income taxes					(268)			(785)			54		615
Loss (gain) on foreign exchange					168			354			54		(616)
Net income (loss) from continuing operations					(9,314)			(1,260)			82		1,532
Net income (loss)					(9,324)			(1,260)			488		1,268
Net income (loss) per common share from continuing operations:
	- Basic				$(0.21)			$(0.03)			$  -		$0.05
	- Diluted				$(0.21)			$(0.03)			$  -		$0.05
Net income (loss) per common share:
	- Basic				$(0.21)			$(0.03)			$0.01		$0.04
	- Diluted				$(0.21)			$(0.03)			$0.01		$0.04
Weighted average common shares outstanding:
	- Basic				43,947,852			44,200,651			44,296,448		44,304,504
	- Diluted				43,947,852			44,200,651			44,296,448		44,324,122
(1) See Non-GAAP Measures
	Aero rentals				900			1,362			1,367		1,329

OUTLOOK

The continued strength in the price of oil combined with the ever increasing application of horizontal drilling has provided for significant improvements in levels of activity in the Western Canadian Sedimentary Basin in the third quarter of 2010. Increased drilling activity targeting the Cardium formation in Central Alberta and ongoing completion and workover demand in heavy oil has created a situation where our service rigs are experiencing utilization levels not seen since 2006. Given the strength in the price of oil going into year end, we can reasonably expect producer activity levels to remain robust for the remainder of the winter season.

Eagle Well Servicing has developed solid relationships with active oil and gas operators across Western Canada by providing the newest equipment available, trained personnel and a competent group of managers that combine to provide value to our customers both in superior customer service and efficient operations. We are expecting continued strong utilization and improved financial performance through the winter season resulting from our customers' oil driven activities and seasonal activity increases from our northern based rigs. With all 35 service rigs fully operational and crewed at the end of September, 2010, and with a new service rig being delivered in late November or early December, we expect that the division will continue to post record hours through the fourth quarter and into the beginning of 2011. When combined with the expected stabilization in our costs and slight movement forward in our pricing, management believes this division will continue to perform well on both a standalone and relative basis with potential for year over year improvements in 2011.

Aero Rental Services, having grown both organically and with the equipment and personnel acquired from Trust Energy Services during the current quarter, has facilities and a staff of pressure control professionals capable of supporting substantially higher revenue with little increase in costs. The application of new production techniques by producers requires new types of equipment which are not readily available. Aero is actively filling this niche market and during the 2010 calendar year we have developed and patented new equipment that will save our customers substantial capital as they bring their new equipment and technologies online. This equipment is currently being utilized by a number of oil companies in both Western Canadian and Eastern Canadian resource plays. Plans are underway to build on our initial successes with this new equipment and technology, and to market it across North America in conjunction with a major oil and gas operator with worldwide operations. We will also be making presentations relating to the new equipment at technical conferences in the United States starting early in 2011. The Corporation expects Aero will become an increasingly important contributor to the financial performance of the Corporation by providing an increasing share of both revenue and cash flow over time.

Canada Tech continues to penetrate both domestic and international markets. Management has continued to work on efficiencies to reduce our fixed costs while at the same time pushing hard to extend our penetration into select markets around the world. Canada Tech has introduced new products to meet the growing demand from various oil sands applications in Canada. We currently have permanent systems installed at a number of domestic producers' oil sands wells on a pilot or trial basis. If these systems prove reliable for the harsh environments under which they are operating we have the potential for significant growth when producers decide to deploy them more widely as a normal part of their field development.

In summary, we are now optimistic the challenges the industry experienced in late 2009 and early 2010 are receding. As we move forward into the winter drilling season, IROC is well positioned to take advantage of the opportunities for growth we predict will start to emerge. We have a strong balance sheet, best in class assets across all of our business lines, and the personnel necessary to execute our business plans.

About IROC Energy Services Corporation

IROC Energy Services Corp. is an Alberta oilfield services company that, through the IROC Energy Services Partnership, provides a diverse range of products, services and equipment to the oil and gas industry that are among the newest and most innovative in the WCSB. IROC combines cutting-edge technology with depth of experience to deliver a product and services offering in three core areas: Well Servicing & Equipment, Downhole Temperature & Pressure Monitoring Tools, and Rental Services. For more information on IROC Energy Services Corp. visit our website at www.iroccorp.com.

Cautionary Statement Regarding Forward-Looking Information and Statements

Certain information contained in this news release, including information related to the Corporation's planned capital expenditures and growth opportunities, outlook for future oil and gas prices, cyclical industry fundamentals, drilling, completion, work over and abandonment activity levels, the Corporation's ability to fund future obligations and capital expenditures, and information or statements that contain words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may", "likely", "estimate", "predict", "potential", "continue", "maintain", "retain", "grow", and similar expressions and statements relating to matters that are not historical facts, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. This information or these statements are based on certain assumptions and analysis made by the Corporation in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. In particular, the Corporation's expectation of uncertain demand and prices for oil and natural gas and the resulting future industry activity, is premised on the Corporation's understanding of customers' capital budgets and their ability to access capital, the focus of its customers on deeper and horizontal drilling opportunities in the current natural gas pricing environment, and the continuing impact of the recent global financial crisis and the current economic recovery all of which affects the demand for oil and gas. Whether actual results, performance or achievements will conform to the Corporation's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Corporation's expectations. Such risks and uncertainties include, but are not limited to: fluctuations in the price and demand for oil and natural gas; fluctuations in the level of oil and natural gas exploration and development activities; fluctuations in the demand for well servicing; the effects of weather conditions on operations and facilities; the existence of competitive operating risks inherent in well servicing; general economic, market or business conditions; changes in laws or regulations, including taxation, environmental and currency regulations; the lack of availability of qualified personnel or management; the other risk factors set forth under the heading "Business Risks" in the annual MD&A for the year ended December 31, 2009 and other unforeseen conditions which could impact on the use of services supplied by the Corporation. 

Consequently, all of the forward-looking information and statements made in this news release are qualified by this cautionary statement and there can be no assurance that the actual results or developments anticipated by the Corporation will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Corporation or its business or operations. Except as may be required by law, the Corporation assumes no obligation to update publicly any such forward-looking information and statements, whether as a result of new information, future events, or otherwise. 

This press release is not for dissemination in United States or to any United States news services. The Common Shares of IROC have not and will not be registered on the United States Securities Act of 1933, as amended (the "United States Securities Act") or any state securities laws and are not offered or sold in the United States or to any US person except in certain transactions exempt from the registration requirements of the United States Securities Act and applicable state securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

NON-GAAP MEASURES

The financial statements have been prepared in accordance with GAAP. Certain supplementary information and measures not recognized under GAAP are provided where Management believes they assist the reader in understanding IROC's results. These measures include:

1. EBITDAS and EBITDAS per share - EBITDAS is defined as earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, foreign exchange gains and losses, goodwill impairment, note receivable impairment, and gains or losses on disposal of property and equipment.  EBITDAS and EBITDAS per share are not recognized measures under GAAP.  The Corporation believes that EBITDAS is provided as a measure of operating performance without reference to financing decisions, income tax impacts and non-cash expenses, which are not controlled at the operating management level.  Accordingly, the Corporation believes EBITDAS is a useful measure for prospective investors in evaluating the financial performance of the Corporation, and specifically, the ability of the Corporation to service the interest on its indebtedness.  Investors should be cautioned that EBITDAS should not be construed as an alternative to net income determined in accordance with GAAP as an indicator of the Corporation's performance.  IROC's method of calculating EBITDAS may differ from those of other companies, and accordingly, EBITDAS may not be directly comparable to measures used by other companies. EBITDAS % is calculated as EBITDAS divided by revenue.
   
   
2. Gross margin is defined as revenue less operating expenses.  Gross margin % is defined as gross margin divided by revenue.  The Company believes that gross margin and gross margin % are useful measures which provide an indicator of the Corporation's fundamental ability to make money on the products and services it sells.  The Corporation believes the relationship between revenues and costs expressed by the gross margin % is a useful measure when compared between different financial periods as it demonstrates the trending relationship between revenues, costs and margins.  Gross margin and gross margin % are not recognized measures of GAAP and do not have any standardized meaning prescribed by GAAP.  IROC's method of calculating gross margin and gross margin % may differ from those of other companies, and accordingly, may not be directly comparable to measures used by other companies.  Gross margin is reconciled to revenue - continuing operations in the FINANCIAL RESULTS AND SELECTED FINANCIAL INFORMATION table.
   
   
   The following is a reconciliation of EBITDAS and EBITDAS per share to net income from continuing operations:
   
   

			Three months ended
$ 000's except number of shares and per share amounts			September 30, 2010		June 30, 2010		March 31, 2010		December 31, 2009
Net income (loss) from continuing operations			437		(1,055)		524		(395)
Depreciation and amortization			2,268		2,003		1,991		2,392
Loss (gain) on foreign exchange			(2)		(88)		97		43
Stock based compensation expense			98		129		178		74
Loss (gain) on disposal of equipment			(5)		(1)		(7)		33
Other interest			45		37		81		92
Interest on long-term debt			263		239		290		373
Interest income			(15)		(11)		(11)		(19)
Goodwill impairment			-		-		-		-
Note receivable impairment (recovery)			(300)		-		-		-
Income taxes:
	Current		-		-		-		-
	Future		187		(278)		235		380
EBITDAS - continuing operations			2,976		975		3,378		2,973
EBITDAS per share
	Basic		$0.07		$0.02		$0.08		$0.07
	Diluted		$0.07		$0.02		$0.08		$0.07

			Three months ended
$ 000's except number of shares and per share amounts			September 30, 2009		June 30, 2009		March 31, 2009		December 31, 2008
Net income (loss) from continuing operations			(9,314)		(1,260)		82		1,532
Depreciation and amortization			2,073		1,978		2,011		1,791
Loss (gain) on foreign exchange			168		354		54		(616)
Stock based compensation expense			64		92		110		67
Loss (gain) on disposal of equipment			(2)		(1)		(4)		1
Other interest			50		54		73		155
Interest on long-term debt			276		187		212		357
Interest income			(18)		(36)		(12)		-
Interest and accretion on debentures			6,850		-		-		-
Goodwill impairment			1,500		-		-		-
Note receivable impairment							-		-
Income taxes:
	Current		-		-		-		(45)
	Future		(268)		(785)		54		660
EBITDAS - continuing operations			1,379		583		2,580		3,902
EBITDAS per share
	Basic		$0.03		$0.01		$0.06		$0.09
	Diluted		$0.03		$0.01		$0.06		$0.09