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NAEP Looks for Project Sources Outside the Oil Sands

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North American Energy Partners Inc. has announced results for the quarter ended June 30, 2015.

Unless otherwise specified, all dollar amounts discussed are in Canadian dollars.

Outlook

• Outside of the oil sands, NAEP is pleased to be working on a bid for the main civil package at the Site C hydroelectric dam project in northeastern British Columbia. The Company is also looking at other revenue diversification opportunities in Western Canada, outside of the oil sands, which include large roadbuilding and infrastructure projects and the potential of one or two liquefied natural gas (LNG) projects launching over the medium term. The Company has already assisted with feasibility studies, budgetary estimates and pre-engineering for some of these LNG opportunities and anticipate an initial site access earthworks project being released for tender in the coming year.
• The Company's recent debt reduction initiatives, with a focus on lowering its cost of debt, combined with a stronger balance sheet and improved operating cost structure will, it believes, provide a stable base to endure the current macroeconomic uncertainties, allowing it to remain competitive in its pricing and providing it with the ability to take advantage of organic growth and acquisition opportunities that may arise.
• In summary, NAEP continues to pursue heavy and light civil construction contracts in the oil sands, along with a series of much broader and more robust major resource projects and provincial highway and infrastructure projects across Canada. The Company continues to improve operating performance in order to maintain, or grow, its share of available work. The Company's clear objective for 2015 is to demonstrate resilience of free cash flow in a very challenging operating environment.

Highlights of the Quarter Ended June 30, 2015

• In April 2015, NAEP purchased a total of $1.3 million par value of its 9.125% Series 1 Debentures, for cancellation. NAEP now has $57.5 million of its 9.125% Series 1 Debentures outstanding.
• 340,000 common shares and 311,195 common shares were purchased and subsequently cancelled in April and June 2015, respectively. This completed the Company's previously announced U.S. share purchase program.
• As at June 30, 2015, NAEP had a cash balance of $40.7 million.

Highlights of Events Post Second Quarter

• On July 8, 2015 the Company signed a Sixth Amended and Restated Credit Agreement with the Company's existing banking syndicate, which matures on September 30, 2018.
• On July 8, 2015 the Company announced its decision to redeem $37.5 million principal amount of its Series 1 Debentures. Holders of record at the close of business on August 10, 2015 will have their Series 1 Debentures redeemed on a pro rata basis on August 14, 2015 for 101.52% of the principal amount, plus accrued and unpaid interest. The redemption will bring the Company's outstanding principal amount of Series 1 Debentures to a balance of $20.0 million.
• The Company today announced its intention to commence a normal course issuer bid in Canada through the facilities of the Toronto Stock Exchange, to purchase up to 532,520 voting common shares.

Results for the Quarter Ended June 30, 2015

• For the three months ended June 30, 2015, revenue was $64.4 million, down from $116.2 million in the same period last year. The lower revenue in the current quarter was a result of the completion of mine development and mechanically stabilized earth (MSE) wall construction activities at the Fort Hills mine and the suspension of mine development activities at the Joslyn mine in the latter half of last year, which could not be fully replaced by the award of an overburden removal project at the Steepbank mine, site development activity from a new project secured at the Kearl mine and haul road construction performed as part of the Company's return to the Aurora mine. Also, contributing to the lower revenue in the quarter was the assumption of reimbursable equipment ownership and maintenance costs by the customer on the Horizon mine overburden removal contract, as anticipated due to the expiration of the long-term contract on June 30, 2015.