Forbes Energy Services Ltd. (NASDAQ: FES) and (TSX: FRB) today announced financial and operating results for the three months and year ended December 31, 2011. All share and per share amounts 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 fourth quarter ended December 31, 2011:

• Revenues from U.S. Operations increased 38% to $124.5 million in the fourth quarter of 2011 compared to $90.1 million in the fourth quarter of 2010, and $115.8 million in the third quarter of 2011. The increase was driven by higher utilization and pricing in both divisions;
• Gross profit from U.S. Operations increased 67% to $35.0 million in the fourth quarter of 2011 compared to $21.0 million in the fourth quarter of 2010, and $26.6 million in the third quarter of 2011.
• GAAP net income from U.S. Operations attributable to common shares was $4.0 million or $0.15 per diluted share compared to a net loss from U.S. Operations attributable to common shares of $0.6 million or a loss of $0.03 per diluted share for the fourth quarter of 2010;
• Adjusted EBITDA from U.S. Operations Excluding Non-recurring Items* totaled $29.7 million in the fourth quarter of 2011 compared to $17.0 million in the fourth quarter of 2010, and $21.5 million in the third quarter of 2011.

Highlights for the year ended December 31, 2011:

• Revenues from U.S. Operations increased 55% to $445.8 million for 2011 compared to $288.2 million for 2010. The increase was driven by significantly higher utilization and pricing in both divisions;
• The year 2011 produced a net loss from U.S. Operations attributable to common shares of $18.8 million, or a loss of $0.90 per share, compared to a net loss from U.S. Operations attributable to common shares of $15.4 million, or a loss of $0.74 per share, for 2010. The 2011 net loss includes a $35.4 million loss on early extinguishment of debt related to refinancing its senior notes in the second quarter;
• Adjusted EBITDA* from U.S. Operations Excluding Non-recurring Items* totaled $88.9 million compared to $45.6 million for 2010.

* Adjusted EBITDA from U.S. Operations Excluding Non-recurring Items, 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 and non-cash stock based compensation excluding non-recurring items. For a reconciliation of such measures to net income, please see the disclosures at the end of this release and on the Company’s Website.

“For Forbes Energy, 2011 was a turning point and we exited the year as strong as we’ve ever been,” said John Crisp, president and CEO of Forbes Energy. “I’m pleased with our positive results for the fourth quarter and full year as well as the strategic actions we took last year to strengthen our capital position. Given the robust industry momentum being created through U.S. oil shale drilling, we are excited at the prospects of capturing a larger share of this market opportunity by expanding our product and services portfolio as well as our geographic reach,” said Mr. Crisp.

Business Segment Results

Well Servicing Segment

In the fourth quarter of 2011, Well Servicing segment revenues from U.S. operations increased $19.9 million or 64% to $51.0 million compared to $31.1 million in the prior year quarter and $48.4 million in the third quarter of 2011. Segment gross profit totaled $12.5 million (24% of revenues) in the fourth quarter compared to $7.5 million (24% of revenues) in the fourth quarter of 2010 and $9.0 million (19% of revenues) for the third quarter of 2011. The sequential and year-over-year increase in the Well Servicing segment is the result of higher prices for the Company’s services and greater utilization, partially offset by rising labor, maintenance and fuel costs.

The Company recorded approximately 112,044 U.S. rig hours for the fourth quarter of 2011, compared to 82,653 U.S. rig hours in the fourth quarter of 2010 and 112,239 U.S. rig hours in the third quarter of 2011. The Company had 159 rigs in its U.S. well service fleet at December 31, 2011. Capital expenditures for U.S. operations in the Well Servicing segment for the quarter ended December 31, 2011, were approximately $12.8 million.

For 2011, Well Servicing segment revenues from U.S. operations increased $68.5 million or 63% to $177.9 million compared to $109.4 million for 2010. Segment gross profit from U.S. operations for 2011 totaled $36.3 million (20% of revenues) compared to $22.2 million (20% revenues) in 2010. The Company recorded approximately 411,539 and 307,377 U.S. rig hours for 2011 and 2010, respectively. Capital expenditures from U.S. operations in the Well Servicing segment were $25.8 million for the year ended December 31, 2011.

Fluid Logistics and Other Segment

In the fourth quarter of 2011, Fluid Logistics and Other segment revenues increased $14.5 million or 25% to $73.5 million compared to $59.0 million in the fourth quarter of 2010 and $67.3 million in the third quarter of 2011. Gross operating profit for the Fluid Logistics and Other segment totaled $22.5 million (31% of revenues) in the fourth quarter of 2011 compared to $13.5 million (23% of revenues) in the prior year quarter and $17.5 million (26% of revenues) in the third quarter of 2011. The year-over-year increase is the result of higher prices for the Company’s services and greater utilization, partially offset by rising labor, maintenance and fuel costs.

The Company recorded 431,140 truck hours during the fourth quarter of 2011 compared to 305,113 hours for the fourth quarter of 2010 and 364,682 hours in the third quarter of 2011. The Company’s fluid transport segment heavy truck fleet totaled 496 at December 31, 2011. Total capital expenditures for the Fluid Logistics and Other segment were approximately $19.6 million for the quarter ended December 31, 2011.

For 2011, Fluid Logistics and Other segment revenues increased $89.1 million or 50% to $267.9 million compared to $178.8 million for 2010. Gross operating profit for this segment in 2011 totaled $74.2 million (27.7% of revenues) compared to $40.7 million (22.7% revenues) for 2010. The Company recorded 1.477 million truck hours in 2011 compared to 1.135 million truck hours in 2010. Capital expenditures for the Fluid Logistics and Other segment were $36.9 million for the year ended December 31, 2011.

Liquidity and Capital Resources

As of December 31, 2011, the Company had $36.6 million in unrestricted cash and $16.2 million of restricted cash. Also the Company had outstanding $280 million of 9% Senior Notes and $16.2 million of other notes. As of March 29, 2012, the Company had $22.4 million in unrestricted cash and the $75 million secured credit facility remained undrawn.

Conference Call

Company management will host a conference call to discuss its fourth quarter 2011 financial results starting at 10 a.m. EST (9 a.m. CST) on Monday, April 2, 2012. Investors can participate in the call by phone, or listen to the call via audio webcast, as follows:

Via phone:

In the U.S. and Canada, dial 888-679-8033 (passcode 51138510). International callers dial 617-213-4846 (passcode 51138510). A telephone replay will be available through April 9, 2012. To access the replay, callers in the U.S. and Canada dial 888-286-8010 (passcode 91910485). International callers can access the replay by dialing 617-801-6888 (passcode 91910485).

To minimize telephone hold times the day of the event, participants can pre-register for the call by visiting the following site: (www.theconferencingservice.com/prereg/key.process?key=P4RJ34QGW).

Via webcast:

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 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 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"), which was filed today, 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 can be found in the Form 10-Q, which is being submitted for filing today 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 Excluding Non-recurring Items. 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 Excluding Non-recurring Items 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.

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