HispanicBusiness

In Canada, the muted demand levels encountered post Q1 2012 continued through the rest of 2012 and overall utilization rates for well servicing decreased by twelve percentage points in Q4 2012 compared to Q4 2011. In Canadian rentals, the December 1st acquisition of oilfield accommodation buildings somewhat mitigated the effect of lower overall demand in Q4 2012. Revenue decreased to $34.1 million in Q4 2012 from $42.6 million in Q4 2011 and operating margins decreased by $2.6 million to $10.2 million from $12.8 million in the same respective periods. On an annual basis reduced demand led to significantly lower utilization rates and lower overall operating hours in 2012 compared to 2011. Revenue in 2012 aggregated $132.4 million and operating margins were $34.9 million compared to $128.7 million of revenue and $40 million in operating margins in 2011. Utilization challenges in 2012, in the face of a much larger service rig and rental equipment fleet, resulted in re-supply, repair, and fixed operating costs having a more pronounced effect in 2012 compared to 2011, and resulted in lower operating margin percentages despite an increase in revenue per hour. These costs were incurred to take advantage of available labour, as well as to ensure the service rig fleet was in condition to fully benefit from an expected long-term trend toward higher utilization of well servicing equipment in North America. The re-supply and repair and maintenance costs incurred in 2012, particularly in Q4, are not expected to be as high going forward.

U.S. well servicing demand did not decrease and Savanna's service rigs in the U.S. generated strong utilization rates throughout 2012. The U.S. well servicing division benefited from increased industry activity levels, increased pricing, and an increased average rig fleet in 2012 compared to 2011, increasing operating margins by 41% year-over-year. In Q4 2012, despite operating two fewer rigs as a result of equipment issues and a rig retirement, overall operating margins were virtually unchanged compared to Q4 2011.

In Australia, the service rigs and related rental equipment generated improved revenues in 2012 based on an average of three rigs working in that period. However, weather and customer delays in Q2 2012 and rig commissioning delays in Q4 2012 reduced utilization of the equipment and resulted in significant crew retention costs. As a result, aggregate operating margins remained flat relative to Q4 2011. As the fleet has begun working more consistently, the Company expects operating margin contributions to increase.

BALANCE SHEET

Savanna's working capital at December 31, 2012, was $89.4 million and its net debt(1) position was $156.5 million. The amount owing on its revolving credit facility was $114.9 million and Savanna's total long-term debt outstanding, excluding unamortized debt issue costs, was $245.8 million. As of the date of this release, $139.6 million was drawn on Savanna's available revolving credit facility of $180 million, and $3.5 million was drawn on Savanna's available operating facility of $20 million. Savanna's current financial position provides the Company with the financial flexibility to execute its strategic plans.

DIVIDEND

In Q4 2012, Savanna declared dividends of $7.8 million or $0.09 per share, bringing the total dividends declared in the year to $23.1 million ($0.27 per share) since reinstating its dividend in April in 2012. Of the dividends declared, $4.7 million was reinvested in additional common shares through the Company's dividend reinvestment plan, $15.8 million was paid in cash and $2.6 million was payable at December 31, 2012 (of which 31% was settled in shares subsequent to the end of the year, through the dividend reinvestment plan).