Wenzel Downhole Tools Ltd. (WZL.TO) is pleased to report its financial results for the three month and six month periods ending June 30, 2012. Comparing the results for the second quarter of 2012 to those of 2011, Revenues were up 34%, Gross Profit was up 16% and Profit Before Income Tax was down 9%.

2012 Second Quarter Results

Consolidated revenues for the second quarter were $24.5 million, compared to $18.3 for the same quarter in 2011. For the six month period ending June 30, 2012, revenues were at $49.1 million, a 38% increase over the same period in 2011. This improvement can be attributed to strong domestic sales as well as a continued increase in horizontal drilling activity in North America. The use of downhole drilling motors in all types of wells being drilled continues to grow as well.

In Canada, 2012 Q2 revenues were $8.4, compared to $3.5 million in 2011 and for the first six months of 2012 revenues were $18.6, up 76% compared to $10.6 million for the same period in 2011. US revenues for Q2, 2012 were $12.6 million, an increase of 26% over the same period in 2011. Comparing the same two periods, the rig count in the US was up by 8%. For the six months ending June 30, the average rig count in the US was up 12% in 2012 compared to 2011 while US revenue was up 30%. This revenue growth in excess of rig count growth reflects the increased use of motors in drilling as well as increased market penetration.

Revenues from sales outside of North America were $3.5 million for the second quarter of 2012, a 26% decrease from those of 2011. The Company's international orders have declined compared to 2011 primarily due to political turmoil and uncertainty in certain countries. The opening of a sales and rental facility in Celle Germany in the fall of 2011 exposed new markets in West/East Europe and the Mediterranean.

Overall Performance

The pre-tax profit for the second quarter was $3.0 million compared to $3.3 million for the same period in 2011. Earnings before interest, taxes, depreciation and amortization and share-based compensation ("EBITDA") for the second quarter of 2012 was $5.1 million compared to $5.5 million in the same period in 2011. Comparing the six month period ending June 30, earnings before taxes were $7.2 million in 2012 versus $5.6 million in 2011. For this six month period EBITDA was $11.2 million in 2012 and $10.9 million in 2011.

Internationally the Company continues to experience interest from current and potential customers. The directional and horizontal drilling techniques developed and extensively used in North America are being applied in petroleum basins around the world, creating a growing market for the equipment, including downhole tools, needed for such drilling.

Financially the Company remains in good shape. Capital expenditures needed to keep up to customer's demands can be financed from internally generated funds. Total debt at June 30, 2012 was $7.3 million, compared to $13.3 million on December 31, 2011.