CE Franklin Ltd. Announces Third Quarter Results -- Results Are In Canadian Dollars.

CALGARY, ALBERTA--(BUSINESS WIRE)--Oct. 15, 1998-- CE Franklin Ltd.(TSE:CFT.) (AMEX:CFK) CE FRANKLIN LTD. (TSE.CFT, AMEX.CFK) today reported results for the third quarter ended September 30, 1998. Sales were $65.1 million, a decrease of $49.8 million from $114.9 million or 43 percent from the record level achieved in the comparable period in 1997. The decrease is due mainly to the impact of a weaker oil price on drilling activity in Western Canada and a reduction in spending on maintenance of existing wells. Drilling activity, as measured by the number of wells drilled, decreased by approximately 55 percent in the third quarter of 1998 from the comparable period in 1997.

Gross profit for the quarter declined less than sales from $15.3 million to $9.3 million or 39 percent from the third quarter of 1997. Gross profit as a percentage of sales increased from 13.3 percent to 14.3 percent due to a shift in product mix.

The number of employees in the company declined by 12 percent during the third quarter of 1998 as a result of layoffs.

There was no net income per share for the third quarter of 1998, before severance and related downsizing expenses, as compared to $0.20 from the third quarter in 1997 and $0.11 in 1996. The reduction resulted from the combination of reduced sales and an investment in internal growth initiatives; including expansion into new markets which are expected to contribute to earnings in 1999 and future years.

Sales for the first nine months of 1998 were $246.2 million, a decrease of $43.9 million or 15 percent from $290.1 million in the first nine months of 1997. Net income for the first nine months decreased by $4.9 million from $7.6 million to $2.7 million and earnings per share fully diluted were $0.15, a decrease of $0.29 from $0.44 from 1997.

"The company is adapting well to this abrupt change in the market conditions and we expect to return to profitability in the fourth quarter assuming drilling activity reaches at least 50 percent of the 1997 level," commented John Gilbank, Chairman and Chief Executive Officer. "Our earnings should continue to improve in 1999 if activity remains near the 1998 level, which is what most oil services analysts are now forecasting," he added.

The company is also reporting that it has conducted a complete review of its computer information systems and technology to identify the systems and technology that could be affected by the year 2000 issue. Since early 1997, the company has been engaged in the process of replacing its fully integrated distribution and financial software. In addition, the new software, which is expected to be in place by April 1999, has been contractually guaranteed by the supplier to be year 2000 compliant. In addition to the new software the Chief Financial Officer, Jean Parker, is leading a task force to document, evaluate, assess, plan, and test any internal or external year 2000 issues. At this point the company is uncertain whether the Y2K readiness of our customers, suppliers, service providers and third parties will have a material effect on the financial results of CE Franklin. The company will have tested and set up contingency plans, if required, before the second quarter 1999. The costs associated with addressing CE Franklin's year 2000 issues have not been material historically and the company does not expect these costs to have a material effect on the financial results of the company in 1998 and 1999.

CE Franklin is Canada's largest distributor of supplies to the oil and gas drilling and production industry. In addition to its complete range of production equipment, including artificial lift technology, the company sells pipe, valves, fittings and maintenance supplies and provides complete customer inventory procurement and management services through its 44 locations across Canada. The company also manufactures and packages specialized products for the energy industry and provides supply packages for projects in the hydrocarbon processing industry through its Piping Resources Division. For more information visit our Web Site at http://www.cefranklin.com. CE Franklin's common stock trades on The Toronto Stock Exchange under the symbol CFT and on the American Stock Exchange under the symbol CFK.

This news release includes forward looking statements within the meaning of section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that expected results will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include economic conditions, seasonality of drilling activity, commodity prices for oil and gas, currency fluctuations and government regulations, and other risks and uncertainties as described in the Company's 1997 Annual Report on Form 20-F as filed with the United States Securities and Exchange Commission.

CE FRANKLIN LTD.
SUMMARY OF FINANCIAL DATA
(All amounts shown in Canadian Dollars)

             Three months Three months Nine months Nine months
                 ended       ended        ended        ended
               September   September    September    September
                     30,         30,          30,          30,
                   1998         1997         1998         1997
              ----------- ------------ ----------- -----------
Selected Income Statement Data:

Sales       $65,091,453 $114,864,233 $246,216,619 $290,122,796

Gross Profit  9,302,339   15,295,812   35,997,315   38,010,632

Selling, General &
 Administrative
 Expenses     7,703,369    8,148,179   26,407,273   22,086,360

Severance & Related
 Expenses       520,000            -      520,000            -

Total SG&A    8,223,369    8,148,179   26,927,273   22,086,360

EBITDA        1,078,970    7,147,633    9,070,042   15,924,272


Net Income     (330,885)   3,445,481    2,669,436    7,560,436

Net Income Per Share
 - Basic          (0.02)        0.21         0.16         0.47
 - Fully Diluted  (0.02)        0.20         0.15         0.44

Weighted Average
 Number of Shares
 Outstanding 16,505,291   16,084,037   16,491,114   15,988,297

Selected Balance Sheet Data:

Working Capital   73,846,101  66,584,436

Total Assets     128,769,146 148,844,754

Long Term Debt    51,100,404  45,209,811

Total Liabilities 77,024,869 104,919,611

Shareholders'
 Equity           51,744,277  43,925,143