Computalog Ltd. Announce Third Quarter Results.

CALGARY, Alberta--(BUSINESS WIRE)--Oct. 24, 1996--Computalog Ltd., announces today that for the nine month period ended September 30, 1996, it generated a net income of $6,619 ($0.52 per share on a fully diluted basis) from revenues of $103,723.

Net income for the three month period ended September 30, 1996 was $2,845 ($0.22 per share on a fully diluted basis) from revenues of $39,995. Cash flow from operations totalled $14,976 for the first three quarters and $6,102 for the third quarter of 1996. These represent increases in cash flow of 19% and 58% respectively, over the same period in 1995.

Further details and a comparison to financial results for the same period in 1995, are provided as follows: -0-

                                 Three Months       Nine Months
                               1996         1995    1996      1995

Revenue                     $39,995      $26,188  $103,723 $84,861
Expenses
 Operating                   27,826       18,114    72,931  57,382
 Selling, general
 & administration             3,013        2,515     8,691   7,935
 Depreciation & amortization  3,257        1,930     8,357   5,533
 Research & development       1,057        1,075     3,192   3,154
 Foreign exchange loss         (10)          108     (197)     201
 Equity loss in affiliate        11           62         9     216
 Interest                       200           58       395     144
Net income (loss) before taxes
  and minority interest       4,641        2,326    10,345  10,296
Income taxes                  1,787          455     3,792   3,423
Net income before
minority interest             2,854        1,871     6,553   6,873
Minority interest                 9            0      (66)       0
Net income                   $2,845       $1,871    $6,619  $6,873

Earnings per share
 Basic                        $0.33        $0.25     $0.76   $0.91
 Fully diluted                $0.22        $0.18     $0.52   $0.60

Cash flow from operations    $6,102      $ 3,856    $14,976 $12,573
-0-

Revenues for the third quarter totalled $39,995 and represented an increase of 53% over the same quarter in 1995. These revenues resulted in a net income of $2,845 and cash flow of $6,102. As compared to 1995, net income has increased by 52% while cash flow increased by 58%.

Revenue for the nine months ended September 30, 1996 increased $18,862 or 22% over revenues generated in the prior year. This increase was primarily a result of the Company's acquisitions of Norjet Geotechnologies Inc., on March 7,1996, and The Bob Fournet Company on May 1, 1996; equipment sales to international joint ventures; and the increased level of drilling activity in Western Canada.

The average Canadian drilling rig count was 296 and a total of 8,329 oil and natural gas wells were completed in Canada during the first nine months of 1996. These represent increases of 6% and 27% respectively as compared to 1995. Drilling activity in the United States increased by 6% to 756 active rigs. Computalog's revenues were generated 67% from its Canadian geographic segment, 19% from the United States segment and 14% internationally.

During the nine month period operating expenses, which totalled $72,931, represented 70% of revenue as compared to 68% in 1995. This increase was a consequence of the greater volume of services performed, the complexities encountered in consolidating the activities of the acquired companies, and a shifting of the revenue mix towards lower margined activities.

Depreciation and amortization expenses have increased $2,824 over 1995 as a result of the amortization of goodwill of $640, the depreciation on acquired assets of $1,202, the depreciation of new asset additions of $796 and lower gains arising from the disposal of certain assets of $186.

Selling, general and administration have increased by $756 or 10% during the period. When compared to revenues these costs have decreased to 8% from 9%. Research and development and other expenses have remained consistent with the prior year.

As at September 30, 1996 the Company had borrowed $6,455 from its Canadian bank and $US2,402 from its United States bank. In order to ensure that sufficient funds are available to finance Computalog's operations and growth initiatives the Company expanded its bank borrowing arrangements to allow for total borrowings of $25 million from a Canadian bank and $US5 million from a United States based bank.

During this quarter Computalog launched a new marketing program for the Paragon Treating System. This service, which utilizes a fluid conditioning device, has proven effective in reducing paraffin, asphaltene, deposition and scale buildup in oilfield tubulars and production equipment. Also during this period, Computalog mobilized $US1 million in equipment to be used in expanding its wholly owned Venezuelan operations and $US6 million in equipment to enter the market in Argentina through ajoint venture in which Computalog has a 49% interest. Both wireline operations are expected to start providing wireline logging services during the fourth quarter of 1996.

Computalog provides wellbore knowledge and solutions through its electric wireline and directional drilling services. These services enable oil and gas producers to manage risk and maximize production. The Company's common shares trade on the Toronto Stock Exchange (symbol CGH) and the NASDAQ National Market (symbol CLTDF).

CONTACT: Computalog

D.F. Robinson, 403/265-6060 (President and CEO)

L.A. Cornez, 403/265-6060 (VP and CFO)