Dawson Production Services Inc. reports record first quarter results.

SAN ANTONIO, Texas--(BUSINESS WIRE)--Aug. 12, 1996--Dawson Production Services, Inc. (Nasdaq/NM: DPSI) announced today financial results for the quarter ended June 30, 1996.

The company posted record first quarter net income of $1,016,000 which was up 212 percent from the first quarter of fiscal 1996. Similarly, record first quarter earnings per share of $0.16, on 6,510,000 average shares outstanding, on a fully diluted basis, were up from $0.12 on 3,125,000 average shares outstanding a year ago. Earnings per share increased by 33 percent while weighted average shares outstanding increased by 108 percent comparing quarter to quarter due to the company's IPO completed in March of 1996.

Revenues in the first quarter increased by 16 percent to $14,678,000 compared to $12,648,000 in the first quarter of fiscal 1996. Operating cash flow, defined as earnings before depreciation, interest, minority interest, taxes and extraordinary item increased 29 percent to $3,047,000 compared with $2,362,000 for the prior year. Commenting on the first quarter results, Chairman, President and CEO, Michael E. Little stated, "We are extremely pleased with our first quarter results. Workover services revenues increased 15 percent to $7,705,000. Liquid services revenues increased 27 percent to $4,339,000 and production services revenues increased 3 percent to $2,632,000. Our rig hours increased 12 percent to 43,666 hours for the quarter. Of that increase 2,349 hours were attributable to the acquisition of the well servicing division of Sage Energy. Quarter to quarter, our truck hours increased 56 percent to 81,478 hours. Of this increase, 18,015 hours were attributable to operating on average, approximately 18 additional trucks comparing quarter to quarter. In addition to improved operating results, the acquisition of the Dawson WellTech, L.L.C. minority interest, accomplished in the third quarter of fiscal 1996, eliminated minority interest expense. The elimination of minority interest expense, coupled with the operating results achieved for the quarter, gave rise to the dramatic increases in earnings, in light of the large increase in our share base resulting from our IPO."

The company previously announced that effective July 29, 1996 it closed the acquisition of Taylor Companies, Inc.

Dawson Production Services, Inc. is a San Antonio, Texas-based diversified energy services company that provides workover rig services, liquid services, and production services to oil and gas operators primarily in Texas and Louisiana. -0-

                     DAWSON PRODUCTION SERVICES, INC.
                     CONSOLIDATED STATEMENTS OF INCOME
                              (unaudited)

                                         Three Months Ended
                                               June 30,
                                      --------------------------
                                          1996           1995
                                      -----------    -----------
Revenues                              $14,677,591    $12,647,883
                                      -----------    -----------
Costs and expenses:
   Operating                            9,492,960      8,139,613
   General and administrative           2,259,617      2,157,018
   Depreciation and amortization        1,375,239      1,012,358
                                      -----------    -----------
        Total costs and expenses       13,127,816     11,308,989
                                      -----------    -----------
         Operating income               1,549,775      1,338,894
                                      -----------    -----------
Other income and expenses:
   Interest expense                        65,378        478,783
   Other expense (income), net           (122,213)       (10,955)
                                      -----------    -----------
        Total other income and
         expenses                         (56,835)       467,828
                                      -----------    -----------
        Income before minority
         interest and income taxes      1,606,610        871,066
Minority interest in consolidated
 subsidiary                                    --        390,928
                                      -----------    -----------
Income before income taxes              1,606,610        480,138
Provision for income taxes                590,960        153,993
                                      -----------    -----------
Net income                              1,015,650        326,145
                                      -----------    -----------
Preferred stock dividends                      --         24,905
                                      -----------    -----------
Net income applicable to
 common stock                         $ 1,015,650    $   301,240
                                      ===========    ===========

Earnings per common share:
  Primary                             $      0.16    $      0.12
  Fully diluted                       $      0.16    $      0.12

Weighted average common and
 common equivalent shares
 outstanding:
  Primary                               6,509,816      2,405,962
  Fully diluted                         6,509,816      3,124,634

CONTACT: Dawson Production Services Inc., San Antonio

P. Mark Stark, 210/828-1838