Forbes Energy Services Reports 2012 Third Quarter Results

Forbes Energy Services Reports 2012 Third Quarter Results

Announces Concentration of Trading on NASDAQ, Decision to Delist From TSX

ALICE, Texas, Nov. 12, 2012 (GLOBE NEWSWIRE) -- Forbes Energy Services Ltd.
(Nasdaq:FES) (TSX:FRB) today announced financial and operating results for the
three months ended September 30, 2012. All share and per share amounts prior
to August 12, 2011 have been adjusted to reflect the four-to-one share
consolidation completed on August 12, 2011.

Please note: The term "U.S. Operations" refers to continuing operations, which
represent the Company's financial results excluding its discontinued Mexico
operations that were sold in January 2012.

Highlights for the quarter ended September 30, 2012:

  oRevenues from U.S. Operations decreased 4.6% to $114.3 million in the
    third quarter of 2012 as compared to $119.8 million in the second quarter
    of 2012, and decreased 1.2% from the $115.8 million reported in the third
    quarter of 2011.

  oGross profit from U.S. Operations decreased to $25.8 million, or 22.5% of
    revenues, in the third quarter of 2012 compared to $33.0 million, or 27.5%
    of revenues, in the second quarter of 2012, and $27.1 million, or 23.4% of
    revenues, in the third quarter of 2011.

  oGAAP net loss from U.S. Operations attributable to common shares was $1.3
    million, or $0.07 per diluted share, for the third quarter of 2012,
    compared to net income from U.S. Operations attributable to common shares
    of $2.6 million or $0.10 per diluted share for the second quarter of 2012,
    and a net income from U.S. Operations attributable to common shares of
    $2.5 million or $0.10 per diluted share for the third quarter of 2011.

  oAdjusted EBITDA from U.S. Operations* totaled $19.2 million in the third
    quarter of 2012 compared to $26.8 million in the second quarter of 2012,
    and $21.5 million in the third quarter of 2011.

^*Adjusted EBITDA from U.S. Operations, a non-GAAP financial measure, is
defined by the Company as income (loss) from continuing operations before
interest, taxes, depreciation, amortization, gain or loss on early
extinguishment of debt, non-cash stock based compensation, and litigation
settlement.For a reconciliation of such measure to net income, please see the
disclosures at the end of this release and on the Company's Website.

Voluntary TSX Delisting

The Company today announced that, because its common stock trades on the
NASDAQ Stock Market ("NASDAQ") under the symbol "FES," the Company intends to
voluntarily delist its common stock from the Toronto Stock Exchange ("TSX").
The Company feels that the minimal trading volume of these shares on the TSX
no longer justifies the expenses associated with maintaining this listing.

The Company believes that its listing with NASDAQ provides its shareholders
with sufficient liquidity, as NASDAQ accounts for a large majority of the
Company's current trading volume. Further, the Company feels that
administrative and regulatory efficiencies will be achieved by focusing on the
single listing.

John Crisp, President and CEO of the Company, stated, "The TSX and the
Canadian capital markets have been very important to the growth of this
Company, however, at this time, with our recent listing on NASDAQ, we feel
that it is in the best interest of the Company to focus our resources on our
NASDAQ listing."

The Company has provided written notice to the TSX regarding the delisting and
anticipates that its common stock will be delisted from the TSX at the close
of trading on Friday, November 16, 2012.

Overview

Crisp stated, "Our third quarter results reflect the past few months' steadily
weakening demand for oilfield services, which persists in the seasonally slow
fourth quarter. The decreased activity by most of our customers was due to
their need to manage capital expenses in the second half of 2012 after an
unexpected improvement in drilling cycle times and consequently, in the number
of completed wells, prematurely draining budgets. Early indicators suggest
that next year's spending will be similar to that in 2012, with some customers
slowly ramping up in the beginning of the first quarter, while others lag
behind.

"Our well servicing segment experienced a decrease in margins as part of the
oilfield services' second-half slowdown. This performance was partly
associated with fewer active 24-hour rigs and higher operating expenses. Our
fluid logistics segment experienced similar but less severe conditions.

"Given the challenging market, we remain focused on liquidity. As of November
12, 2012, we have $26.8 million in unrestricted cash and $72.1 million
available under our revolving credit agreement for total liquidity of $98.9
million. We are projecting approximately $20.0 million in capital
expenditures for 2013, which will be spent with discretion as we strive to
maintain our liquidity goal."

Business Segment Results

Well Servicing Segment

In the third quarter of 2012, Well Servicing segment revenues from U.S.
Operations decreased $0.7 million, or 1.5%, to $50.6 million compared to $51.3
million in the second quarter of 2012, and increased $2.2 million compared to
$48.4 million in the prior year quarter. Segment gross profit totaled $9.2
million, or 18.2% of revenues, in the third quarter of 2012 compared to $13.9
million, or 27.0% of revenues, for the second quarter of 2012, and $9.5
million, or 19.7% of revenues, in the prior year quarter.This decrease is
attributable to fewer 24-hour rigs working, higher group and workers
compensation insurance expense, increased bad debt expense, and other factors
in line with cyclical industry trends.

The Company recorded approximately 107,435 U.S. rig hours for the third
quarter of 2012, compared to 114,308 in the second quarter of 2012, and
112,239 in the third quarter of 2011. Capital expenditures for U.S. Operations
in the Well Servicing segment for the quarter ended September 30, 2012, were
approximately $6.2 million associated with two new coiled tubing spreads, mud
pumps, high-pressure pumps and related well service equipment.

As of September 30, 2012, the Company had 162 well service rigs, nine tubing
testing systems, four pump-down units and two coiled tubing units.

Fluid Logistics and Other Segment

In the third quarter of 2012, Fluid Logistics and Other segment revenues
decreased $4.7 million, or 6.9%, to $63.8 million compared to $68.5 million in
the second quarter of 2012, and decreased $3.5 million compared to $67.3
million in the third quarter of 2011. Gross operating profit for the Fluid
Logistics and Other segment totaled $16.6 million, or 26.0% of revenues, in
the third quarter of 2012 compared to $19.1 million, or 27.9% of revenues, in
the second quarter of 2012, and $17.5 million, or 26.0% of revenues, in the
prior year quarter.

The Company recorded 405,672 truck hours during the third quarter of 2012
compared to 422,248 hours in the second quarter of 2012, and 364,682 hours for
the third quarter of 2011. The Company's heavy truck fleet totaled 580 at
September 30, 2012.Capital expenditures for the Fluid Logistics and Other
segment were approximately $5.7 million for the quarter ended September 30,
2012, and consisted of purchases or additions to frac tanks, salt water
disposal wells, and other related equipment.

As of September 30, the Company utilized 475 vacuum trucks, 21 high pressure
pump trucks, 84 other heavy trucks, 3,149 frac tanks, and 23 salt water
disposal wells.

Liquidity and Capital Resources

As of September 30, 2012, the Company had $5.3 million in unrestricted cash
and $16.6 million of restricted cash.The Company also had $280 million of
9.0% Senior Notes and $16.1 million of other notes outstanding.In November,
restricted cash of $13.7 million related to Mexico was released and returned
to the Company. As of November 12, 2012, the Company had $26.8 million in
unrestricted cash and the $75.0 million secured credit facility remained
undrawn, except for the letters of credit in the amount of $2.9 million.New
equipment to be added for the remainder of 2012 will primarily consist of
three new coiled tubing spreads.This new equipment will be either financed
through debt financing or operating leases.

Conference Call

Company management will conduct an investor conference call starting at 10
a.m. EST (9 a.m. CST) on Tuesday, November 13^th, 2012.

To participate, please dial the toll free number at (877) 303-1298 and provide
the Conference ID: 69433283. To access the replay of the call, dial (855)
859-2056. Alternatively, a webcast is available. To access, visit
www.ForbesEnergyServices.com and click on "Investor Relations," then "Events
and Presentations."Shortly after the conclusion of the call, a webcast replay
will be made available for a period of 21 days on the same page of the
Company's investor relations website.

About the Company

Forbes Energy Services Ltd. is an independent oilfield services contractor
that provides a broad range of drilling-related and production-related
services to oil and natural gas companies, primarily onshore in Texas,
Mississippi and Pennsylvania.More information on the Company can be found by
visiting www.ForbesEnergyServices.com.

Forward-Looking Statements and Regulation G Reconciliation

This press release contains "forward-looking statements," as contemplated by
the Private Securities Litigation Reform Act of 1995, in which the Company
discusses factors it believes may affect its performance in the future. The
accuracy of the Company's assumptions, expectations, beliefs and projections
depend on events or conditions that change over time and are thus susceptible
to change based on actual experience, new developments and known and unknown
risks. The Company gives no assurance that the forward-looking statements will
prove to be correct and does not undertake any duty to update them. The
Company's actual future results might differ from the forward-looking
statements made in this press release for a variety of reasons, which include:
supply and demand for oilfield services and the level of oil and natural gas
prices; the timing of spending by customers in relation to their exploratory
budgets; the continued uncertainty in the global financial markets and its
effect on domestic spending in the oil and natural gas industry; the Company's
ability to maintain or improve pricing on its core services; the potential for
excess capacity in the industry; and competition. Additional factors that you
should consider are set forth in detail in the Risk Factors section of the
Company's Annual Report on Form 10-K for the year ended December 31, 2011(the
"Form 10-K"), as well as other filings the Company has made with the
Securities and Exchange Commission. Should one or more of the foregoing risks
or uncertainties materialize, or should the Company's underlying assumptions
prove incorrect, the Company's actual results may vary materially from those
anticipated in its forward-looking statements, and the Company's business,
financial condition and results of operations could be materially and
adversely affected.

The Company's financial statements and management's discussion and analysis of
financial condition and results of operations will be found in the Company's
Form 10-Q, which will be submitted for filing by November 14, 2012 with the
Securities and Exchange Commission and posted on the Company's website.

This press release also contains references to the non-GAAP financial measure
of Adjusted EBITDA from U.S. Operations. For a reconciliation of such measure
to net income, please see the table at the end of this release. Management's
opinion regarding the usefulness of Adjusted EBITDA from U.S. Operations to
investors and a description of the ways in which management uses such measure
can be found on the "Investor Relations" page of the Company's website..

Forbes Energy Services Ltd.
Selected Statement of Operations Data
(Unaudited)
                                                           
                 Three Months Ended September Nine Months Ended September
                  30,                          30,
                 2012            2011          2012           2011
                                                           
Revenues                                                    
Well servicing    $50,565,392   $48,421,163 $154,119,591 $126,869,856
Fluid logistics   63,755,018     67,340,814   211,470,157   194,371,015
and other
Total revenues    114,320,410    115,761,977  365,589,748   321,240,871
                                                           
Expenses                                                    
Well servicing    41,371,866     38,880,709   117,912,986   103,029,914
Fluid logistics   47,185,691     49,816,736   151,395,792   142,730,107
and other
General and       7,278,249      6,187,055    26,022,710    24,983,659
administrative
Depreciation and  13,187,483     9,861,254    37,073,641    29,077,466
amortization
Total expenses    109,023,289    104,745,754  332,405,129   299,821,146
Operating income  5,297,121      11,016,223   33,184,619    21,419,725
                                                           
Other income                                                
(expense)
Interest expense, (7,138,339)    (6,740,695)  (20,851,339)  (20,468,815)
net
Loss on early
extinguishment of --            --          --           (35,414,833)
debt
Other income, net --            --          --           69,104
Income (loss)
from continuing   (1,841,218)    4,275,528    12,333,280    (34,394,819)
operations before
taxes
Income tax        (571,433)      1,735,702    5,745,575     (10,455,365)
expense (benefit)
Income (loss)
from continuing   (1,269,785)    2,539,826    6,587,705     (23,939,454)
operations
Income from
discontinued
operations, net
of tax expense
(benefit) of      (1,072,248)    1,821,581    (1,566,785)   5,510,677
($0.0 million),
$1.1 million,
$0.4 million,
$3.2 million
respectively
Net income (loss) (2,342,033)    4,361,407    5,020,920     (18,428,777)
Preferred shares  (194,139)      (194,135)    (582,417)     7,552
dividends
Net income (loss)
attributable to   $(2,536,172)  $4,167,272  $4,438,503   $(18,421,225)
common
shareholders
                                                           
Income (loss) per
share of common
stock from                                                  
continuing
operations
Basic             $(0.07)       $0.11       $0.29        $(1.14)
Diluted           $(0.07)       $0.10       $0.25        $(1.14)
Income (loss) per
share of common
stock from                                                  
discontinued
operations
Basic             $(0.05)       $0.09       $(0.08)      $0.26
Diluted           $(0.05)       $0.06       $(0.06)      $0.26
Income (loss) per
share of common                                             
stock
Basic             $(0.12)       $0.20       $0.21        $(0.88)
Diluted           $(0.12)       $0.16       $0.19        $(0.88)
Weighted average
number of shares                                            
outstanding
Basic             21,068,417     20,918,417   21,038,850    20,918,417
Diluted           21,068,417     26,600,004   26,650,490    20,918,417
                                                           

Forbes Energy                                              
Services Ltd.
Selected Balance                                           
Sheet Data
(Unaudited)                                               
                                                           
                  September 30,   December 31,               
                  2012          2011                     
Cash             $5,311,287    $36,600,091              
Accounts          103,771,271    132,024,147               
receivable, net
Working capital  64,757,896     86,765,717                
Other             28,730,492     30,876,389                
intangibles, net
Total assets     527,534,967    550,423,053               
Total debt       296,088,184    296,150,274               
Deferred tax      33,326,479     27,491,812                
liability
Shareholders'     135,362,690    125,780,359               
equity
                                                           
                                                           
                                                           
Forbes Energy                                               
Services Ltd.
Selected Operating                                          
Data
                                                           
                  Three Months Ended September Nine Months Ended September
                   30,                          30,
                  2012          2011        2012        2011
Working days     63             64           192          191
                                                           
Rig hours        107,435        112,239      339,375      299,495
                                                           
Truck hours      405,672        364,682      1,261,424    1,045,524
                                                           
                                                           
                                                           
Forbes Energy                                              
Services Ltd.
Reconciliation of Net Income from Continuing                 
Operations to Adjusted EBITDA
(Unaudited)                                               
                                                           
                  Three Months Ended September Nine Months Ended September
                   30,                          30,
                  2012          2011        2012        2011
Net Income (loss)
from continuing    $(1,269,785)  $2,539,826  $6,587,705  $(23,939,454)
operations
Depreciation and   13,187,483     9,861,254    37,073,641   29,077,466
amortization
Interest expense,  7,138,339      6,740,695    20,851,339   20,468,815
net
Income tax expense (571,433)      1,735,702    5,745,575    (10,455,365)
(benefit)
Share-based        708,417        581,355      4,346,025    1,929,633
compensation
Loss on early
extinguishment of  --            --          --          35,414,833
debt
Litigation
settlement and     --            --          --          6,784,164
associated legal
fees
Adjusted EBITDA
from U. S.         $19,193,021   $21,458,832 $74,604,285 $59,280,092
Operations

CONTACT: Preston Graham
         Investor Relations
         214-987-4121