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FRAC TECH SERVICES, LLC FRAC TECH SERVICES, INC.

Quarterly Report for the quarter ended September 30, 2011

FRAC TECH SERVICES, LLC FRAC TECH SERVICES, INC. TABLE OF CONTENTS

Important Notices to Readers................................................................................................................................................................................. 1 Index to Financial Statements ................................................................................................................................................................................ 2 Consolidated Financial Statements ........................................................................................................................................................................ 3 Management's Discussion and Analysis of Financial Condition and Results of Operations ................................................................................. 15 Quantitative and Qualitative Disclosures about Market Risk ................................................................................................................................ 22 Legal Proceedings .................................................................................................................................................................................................. 22 Risk Factors ........................................................................................................................................................................................................... 22

Nothing herein constitutes an offer to sell, or a solicitation of an offer to buy, any securities.

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IMPORTANT NOTICES TO READERS Presentation of this Quarterly Report This Quarterly Report includes the historical consolidated financial statements of Frac Tech Services, LLC and its subsidiaries and related financial information. Frac Tech Services, Inc. was formed as a wholly owned subsidiary of Frac Tech Services, LLC under the name "Frac Tech Finance, Inc." solely to serve as co-issuer of the Issuer's 7.125% Senior Notes dues 2018 (the "Senior Notes") and has no assets or liabilities other than with respect to the Senior Notes. Subsequent to the issuance of the Senior Notes, the co-issuer changed its name to "Frac Tech Services, Inc." Terms Used in this Quarterly Report Unless the context requires otherwise, references in this report to "Frac Tech," "we," "us," "our" or "ours" refer to Frac Tech Services, LLC, together with its subsidiaries, and "Issuers" refers to Frac Tech Services, LLC and Frac Tech Services, Inc. Cautionary Statement Regarding Forward-Looking Statements Certain statements in this report constitute forward-looking statements. You should not place undue reliance on these statements. These forward-looking statements include statements that reflect the views of our senior management with respect to our current expectations, assumptions, estimates and projections about Frac Tech and our industry. All statements other than statements of historical fact may be forward-looking statements. Forwardlooking statements are often, but not always, identified by the use of words such as "anticipate," "plan," "continue," "estimate," "expect," "may," "will," "intend," "could," "should," "believe" and similar expressions. Forwardlooking statements address matters that involve risks and uncertainties that could cause actual results or events to differ materially from those anticipated in these forward-looking statements as of the date of this report. We believe that these risks and uncertainties include the following: general economic conditions; the demand for hydraulic fracturing and other stimulation services during completion of oil and natural gas wells or during post-completion recovery enhancement efforts; volatility in market prices for oil and natural gas and the effect of this volatility on the demand for oilfield services generally; regional competition; liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations; our ability to comply with the financial covenants and other restrictive covenants in our debt agreements; sourcing, pricing and availability of raw materials, component parts, equipment, supplies, facilities and skilled personnel; our ability to integrate technological advances and match advances of our competition; the availability of capital; uncertainties in weather and temperature affecting the duration of the service periods and the activities that can be completed; dependence on a limited number of major customers; and changes in legislation and the regulatory environment. The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report and under the heading "Risk Factors" in our Annual Report for the year ended December 31, 2010. If one or more events related to these or other risks and uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may differ materially from what we anticipate. We do not intend, and do not assume any obligation, to update any forward-looking statements.

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FRAC TECH SERVICES, LLC INDEX TO FINANCIAL STATEMENTS Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 2010 and September 30, 2011 (unaudited) ............................................................................... 3 Consolidated Statements of Income for the three and nine months ended September 30, 2010, and 2011 (unaudited).......................................... 4 Consolidated Statements of Members' Equity for the nine months ended September 30, 2010 and 2011 (unaudited) .......................................... 5 Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2011 (unaudited) ................................................... 6 Notes to Consolidated Financial Statements (unaudited) ........................................................................................................................................ 7

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FRAC TECH SERVICES, LLC CONSOLIDATED BALANCE SHEETS (Unaudited) (In $000's)

De ce mbe r 31, 2010

Se pte mbe r 30, 2011

AS S ETS Current assets: Cash and cash equivalents ...................................................................................................... 148,415 $ 291,781 $ Accounts receivable -- trade, net ...................................................................................................... 201,959 228,627 Accounts receivable -- related parties, net ...................................................................................................... 32,494 91,780 Inventories, net ...................................................................................................... 83,733 161,050 Prepaid expenses ...................................................................................................... 10,451 10,796 Other current assets ...................................................................................................... 263 505 Total current assets ...................................................................................................... 641,173 620,681 Fixed assets: Property and equipment ......................................................................................................1,296,347 972,714 Construction in process ...................................................................................................... 55,796 43,175 Equipment advances ...................................................................................................... 8,925 8,320 Accumulated depreciation ......................................................................................................(435,097) (317,203) Total fixed assets, net ......................................................................................................925,366 707,611 Goodwill ....................................................................................................................................... 3,212 3,212 Other intangible assets ...................................................................................................... 5,644 5,644 Other assets, net ...................................................................................................... 14,780 15,998 Total assets ...................................................................................................... $ 1,351,928 $ 1,591,393

LIABILITIES AND MEMBERS ' EQUITY Current liabilities: Accounts payable ...................................................................................................... $ $ 125,437 157,237 Amounts due to related parties ......................................................................................................300 14,751 Accrued liabilities ...................................................................................................... 76,772 69,664 Current portion of long-term debt ...................................................................................................... 12,925 507 Total current liabilities ...................................................................................................... 229,885 227,708 Long-term liabilities: Long-term notes, net of current portion ...................................................................................................... 576,639 550,947 Deferred gain ...................................................................................................... 924 655 Total long-term liabilities ...................................................................................................... 577,563 551,602 807,448 Commitments and contingencies (Note 9) M embers' equity ...................................................................................................... 544,480 779,310 812,083

Total liabilities and members' equity ........................................................................................................ $ 1,351,928 $ 1,591,393

The accompanying notes are an integral part of these consolidated financial statements.

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FRAC TECH SERVICES, LLC CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In $000's)

Three Months Ended September 30, 2010 2011

Nine Months Ended September 30, 2010 2011

Revenues: Revenues from third parties ...................................................................................................... $ 317,560 $ 542,369 $ 735,544 $ 1,454,509 Revenues from related parties ...................................................................................................... 36,763 99,521 70,653 271,376 Total revenues ...................................................................................................... 354,323 641,890 806,197 Operating costs: Costs of revenues...................................................................................................... 432,542 174,170 338,896 Selling and administrative costs ...................................................................................................... 21,165 51,259 57,366 Depreciation and amortization ...................................................................................................... 26,848 48,096 79,807 Total operating costs...................................................... 222,183 438,251 569,715 Income from operations ......................................................................................................236,482 132,140 203,639 Other income (expense): Interest income ...................................................................................................... 104 161 225 Interest expense ...................................................................................................... (13,787) (2,137) (9,711) Other ...................................................................................................... (656) (24) (90) Net other expense ...................................................................................................... (2,057) (10,206) (13,652) Income before income taxes ...................................................................................................... 130,083 193,433 222,830 Provision for income taxes ...................................................................................................... 1,197 1,225 2,882 Net income ...................................................................................................... $ 128,886 $ 192,208 $ 219,948 $ 1,725,885 885,338 166,320 126,661 1,178,319 547,566 367 (29,855) (1,707) (31,195) 516,371 4,006 512,365

The accompanying notes are an integral part of these consolidated financial statements.

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FRAC TECH SERVICES, LLC CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY (Unaudited) (In $000's)

Nine Months Ended September 30, 2010 2011

M embers' equity at beginning of period ...................................................................................................... $ 318,829 $ 544,480 Ownership-based compensation ...................................................................................................... 18,165 Distributions to members.......................................................................................... (26,000) (260,142) Reorganization distribution.......................................................................................... (490) Non-cash equity adjustment with members............................................................................ (2,935) Contributions from members.................................................................................. 100,000 Non-cash contribution from parent............................................................................ 150 Net income ...................................................................................................... 219,948 512,365 M embers' equity at end of period ...................................................................................................... $ 612,287 $ 812,083

The accompanying notes are an integral part of these consolidated financial statements.

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FRAC TECH SERVICES, LLC CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In $000's)

Nine Months Ended September 30, 2010 2011

Cash flows from operating activities: Net income ...................................................................................................... $ 219,948 $ 512,365 Adjustments to reconcile net income to cash flow from operating activities: Depreciation and amortization ...................................................................................................... 79,807 126,661 Impairment of service equipment .......................................................................... 9,352 Loss on sale of assets ..................................................................................... 464 2,665 Amortization of deferred debt financing costs .......................................................................... 1,294 Amortization of deferred gain .......................................................................... (269) (269) Bad debts ...................................................................................................... 2,163 (1,136) Ownership-based compensation .......................................................................... 18,315 Changes in fair value of interest rate swaps .......................................................................... (4,875) Changes in operating assets and liabilities: Accounts receivable ...................................................................................................... (137,983) (85,384) Inventories ......................................................................................................(19,345) (77,317) Prepaid expenses ...................................................................................................... (3,230) (345) Other assets ...................................................................................................... (505) (2,975) Accounts payable ...................................................................................................... 40,404 17,531 Accrued liabilities ...................................................................................................... 15,644 (5,878) Customer prepayments ...................................................................................................... (5) Net cash provided by operating activities ...................................................................................................... 201,570 505,527 Cash flows from investing activities: Purchase of property and equipment ...................................................................................................... (116,202) (385,524) Proceeds from disposition of assets ...................................................................................................... 3,029 24,000 Net cash used in investing activities ...................................................................................................... (113,173) (361,524) Cash flows from financing activities: Proceeds from revolving credit facility ...................................................................................................... 131,510 Repayment of revolving credit facility ........................................................................................................ (279,372) Proceeds from long-term debt ...................................................................................................... 14,000 Repayment of long-term debt ...................................................................................................... (18,002) (27,611) Contributions from members............................................................................ 100,000 Loans from members ...................................................................................................... (3,395) Net change in receivables from related parties ...................................................................................................... 486 384 Distributions to members .............................................................................. (26,000) (260,142) Net cash used in financing activities ...................................................................................................... (80,773) (287,369) Net increase (decrease) in cash ...................................................................................................... (143,366) 7,624 Cash and cash equivalents, beginning of period ...................................................................................................... 26,039 291,781 Cash and cash equivalents, end of period ...................................................................................................... $ 33,663 $ 148,415

The accompanying notes are an integral part of these consolidated financial statements.

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FRAC TECH SERVICES, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In $000's, unless indicated otherwise) NOTE 1 -- DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION These financial statements should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2010, included in our 2010 Annual Report, which is available on our website (www.fractech.net). Accounting policies used in the preparation of these unaudited consolidated financial statements are consistent in all material respects with the accounting policies described in the Notes to Consolidated Financial Statements included in our Annual Report. These financial statements and notes are representations of our management who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America ("US GAAP") and have been consistently applied in all material respects in the preparation of these financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. These financial statements relate to the three and nine months ended September 30, 2010 (the "Prior Quarter" and the "Prior Period", respectively) and the three and nine months ended September 30, 2011 (the "Current Quarter" and the "Current Period", respectively). In these notes, references to "the Company," "we," "us," and "our" refer to Frac Tech Services, LLC and its subsidiaries. Description of Business Frac Tech Services, LLC ("Frac Tech Services") provides hydraulic fracturing ("pressure pumping" or "frac services") to oil and natural gas producing companies through its direct and indirect subsidiaries. Effective September 30, 2010, our then-current members assigned all ownership interests of certain related entities to us, all of which were also under common control. As a result of these assignments, these entities, including entities that were previously consolidated under Financial Accounting Standards Board ("FASB") Interpretation No. 46R (FIN 46), Consolidation of Variable Interest Entities, an Interpretation of APB No. 51 (which is now incorporated into ASC 810) became our wholly-owned subsidiaries. The historical consolidated balance sheets, and the historical statements of operations, members' equity and cash flows have all been presented as if the reorganization of these entities took place as of the beginning of the earliest period presented. We provide our services during well completion or during attempts to re-stimulate wells that have experienced production declines. Since 2003, service capacity has been expanded by the continuing addition of equipment. At the end of September 2011, we were providing fracturing services out of 12 districts: Aledo, TX; Artesia, NM; Bryan, TX; Elk City, OK; Longview, TX; Minot, ND; Odessa, TX; Pleasanton, TX; Shreveport, LA; Vernal, UT; Washington, PA; and Williamsport, PA. Within our consolidated group, we build hydraulic fracturing units and various other smaller pieces of equipment that are essential parts of the fracturing business. We produce from our own mines and processing plants much of the raw sand and resin-coated sand we use as proppants, and we transport most of the raw sand and other products to job sites by rail and truck using our distribution network. We also blend some of the chemicals we use in our operations at our chemical blending facility, located in Chickasha, Oklahoma, using our own proprietary formulas. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of these financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain reclassifications from 2010 amounts have been made to conform to the three and nine months ended September 30, 2011 financial statement presentation with no effect on previously reported net income, retained earnings, or cash flows from operations. For the nine months ended September 30, 2010, we reclassified: $79 million of depreciation and depletion expense from costs of revenues and $1 million of amortization expense from

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net other expense to depreciation, depletion and amortization; and $17 million of selling and administrative costs into costs of revenues. NOTE 2 -- SALE OF CONTROLLING INTEREST On May 6, 2011, World Investment Group, LLC ("WIG"), which owned 74.2% of the outstanding membership interests in our parent holding company, Frac Tech Holdings, LLC, sold all of its membership interests in Frac Tech Holdings to Frac Tech International, LLC (the "Acquisition Transaction"). Frac Tech International was a newlyformed limited liability company owned by (1) Maju Investments (Mauritius) Pte Ltd, an indirect wholly owned investment holding company of Temasek Holdings (Private) Limited ("Temasek") (2) Chesapeake Operating, Inc. ("Chesapeake"), (3) Senja Capital Ltd ("Senja") and (4) other investors. Prior to the Acquisition Transaction, Chesapeake owned 25.8% of the outstanding membership interests in Frac Tech Holdings. In connection with the Acquisition Transaction, Chesapeake contributed its Frac Tech Holdings membership interests to Frac Tech International in exchange for cash and membership interests representing 30% of Frac Tech International's outstanding membership interests. Following the closing of the Acquisition Transaction and this contribution of membership interests by Chesapeake, Frac Tech International owns all of the outstanding membership units of Frac Tech Holdings. In connection with the Acquisition Transaction, Frac Tech International entered into a $1.7 billion senior secured credit facility arranged by Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets, Inc. Frac Tech International incurred $1.5 billion in term loan indebtedness under the senior secured credit facility to finance the Acquisition Transaction (the "Senior Secured Term Loan"). The Senior Secured Term Loan matures in 2016. Subsequent to the Acquisition Transaction, Frac Tech International, LLC changed its name to FTS International, LLC and Frac Tech Holdings, LLC changed its name to FTS International Holdings, LLC. Change of Control Offer The Acquisition Transaction constituted a Change of Control as defined in the Indenture dated November 12, 2010 (the "Indenture"). As a result of the occurrence of the Change of Control, as required by the Indenture, we made an offer to purchase any and all of our outstanding 7.125% Senior Notes due 2018 (the "Senior Notes') at a price equal to 101% of the outstanding principal amount of the Senior Notes plus accrued and unpaid interest to, but not including, the date of purchase (the "Offer to Purchase"). We commenced the Offer to Purchase on May 6, 2011. On June 7, 2011, we announced that $320 principal amount of the outstanding Senior Notes had been validly tendered and accepted for purchase in such tender offer. Sale of Guarantor Subsidiaries In connection with the Acquisition Transaction, WIG purchased from us 100% of the outstanding equity interests in our subsidiary, Frac Tech Horizons, LLC ("Horizons"), for a purchase price of approximately $17.6 million. At the time of the closing, the assets of Horizons consisted of two airplanes and the outstanding equity of its wholly owned subsidiary, FTS Aero, LLC. Horizons had outstanding debt of approximately $11.8 million secured by one of such airplanes. The assets of FTS Aero, LLC consisted of one airplane. The Board of Managers of Frac Tech Services, LLC and the disinterested member of the Board approved the transaction and determined, as required by the Indenture, that the purchase price was at least equal to the fair market value of the Horizons Units and that the terms and conditions of the transaction were no less favorable to us than would have been obtained in an arm'slength, free market transaction with an informed and willing buyer unaffiliated with us. Upon the closing of that transaction, which occurred on the same date as the Acquisition Transaction, and in accordance with the Indenture, Horizons and FTS Aero, LLC, ceased to be guarantors of the Senior Notes under the Indenture. We recorded this transaction as an equity adjustment with our members. Change of Control Payment and Acceleration of Management Option The Acquisition Transaction constituted a change of control for purposes of certain employment agreements. Pursuant to the terms of these agreements, as a result of the Acquisition Transaction, certain options vested upon change of control and additional compensation payments became due. During the period, $18,165 of ownershipbased compensation expense was recognized related to these options, which included the impact of the accelerated vesting as well as an additional $9.6 million in bonuses that became payable due to the change of control.

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NOTE 3 -- ACCOUNTS RECEIVABLE At December 31, 2010, our accounts receivable, net totaled $234,453 including $32,494 due from related parties and an allowance for bad debts of $6,717. At September 30, 2011, our accounts receivable, net totaled $320,407 including $91,780 due from related parties and an allowance for bad debts of $4,928. Collection of receivables generally occurs between thirty and sixty days after the invoice date. Total bad debt expense was $2,163 for the Prior Period and ($1,136) for the Current Period, due to collection of a previously reserved receivable. NOTE 4 -- INVENTORIES The following table summarizes our inventories:

December 31, 2010 September 30, 2011

Proppants and chemicals ....................................................................................... $ 29,664 $ M aintenance parts ......................................................................................................... 53,965 Fuel ............................................................................................................................. 104 Totals .............................................................................................................. $ 83,733 $

69,076 91,233 741 161,050

NOTE 5 -- FIXED ASSETS The following table summarizes our fixed assets. Depreciation expense totaled $78,723 and $126,467 in Prior Period and Current Period, respectively.

December 31, 2010 September 30, 2011 Estimated Useful Life (in years)

Land ................................................................................................ $ 43,573 $ 51,434 Buildings and improvements ....................................................................................... 108,343 156,576 Service equipment ....................................................................................... 741,916 1,039,324 Vehicles and transportation equipment ....................................................................................... 63,645 26,858 Office equipment and other ....................................................................................... 22,155 15,237 Equipment construction in process ....................................................................................... 43,175 55,796 Other ....................................................................................... 8,925 8,320 Total cost of fixed assets ....................................................................................... 1,024,814 1,360,463 Accumulated depreciation ....................................................................................... (435,097) (317,203) Net fixed assets ....................................................................................... $ $ 707,611 925,366

N/A 15-39 2.5-10 5-20 3-7 N/A N/A

The estimated useful life of service equipment placed into service on or after October 1, 2010 ranges from 30 months to ten years. Service equipment used in our hydraulic fracturing services was previously depreciated over a period of ten years. Effective October 1, 2010, these items are being depreciated over a period of seven years. High pressure iron, which is also included in service equipment, has an estimated useful life of 30 months. Also included in the balance of service equipment is the cost of manufacturing equipment which we utilize for the manufacture of our service equipment components. This manufacturing equipment has a useful life ranging from five to ten years. Prior to January 1, 2010, we generally capitalized fluid ends added as replacement parts over a useful life of not less than 12 months. During 2010, we reassessed our policies regarding the useful lives of our service equipment. Beginning October 1, 2010, we have charged the cost of fluid ends added as replacement parts to cost of revenues upon installation. The remaining carrying value of the replacement fluid ends in service as of September 30, 2010, which was approximately $8,000, has been depreciated over the weighted average remaining useful life, which was approximately 12 months at September 30, 2010. We capitalize an allocated amount of interest on borrowings for self-constructed assets and equipment during their construction period. For the Prior Period and Current Period, we capitalized interest of $769 and $3,987, respectively.

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When we order equipment from manufacturers, we are often required to pay a deposit (advance) against the total cost of the order as part of the acceptance of the order. Occasionally, we are required to make progress payments as manufacturing milestones are reached. These payments are classified as "Other" in the table above. NOTE 6 -- IMPAIRMENT During the Prior Period, we recognized approximately $9,352 in impairment of service equipment. The impairment was the result of increased utilization of our equipment in more demanding shale reservoirs that resulted in the replacement of equipment earlier than anticipated. No impairment charges were recorded in the Current Period. NOTE 7 -- ACCRUED LIABILITIES The following table summarizes our accrued liabilities:

December 31, 2010 September 30, 2011

Interest ............................................................................................................................. $ 8,100 $ 19,476 State sales and gross receipts tax .......................................................................................................... 21,459 16,956 Payroll related.......................................................................................................... 10,446 15,546 Property tax ............................................................................................................................. 5,391 4,185 State franchise tax .......................................................................................................... 3,506 2,872 Bonus .......................................................................................................................... 22,644 2,698 Other ...................................................................................................................................... 6,725 6,432 Totals.......................................................................................................... $ 76,772 $ 69,664

NOTE 8 -- DEBT The following table summarizes our long-term debt:

December 31, 2010 September 30, 2011

Senior Notes, due November 2018; Interest payable semi-annually, 7.125% per annum ........................................................................... $ 550,000 $ 549,680 Term installment note payable maturing 2016; due in monthly installments of $63 plus interest, at a floating rate at LIBOR plus 0.85%; collateralized by an airplane (see Note 2) ....................................... 12,000 Term installment notes payable with various maturities and rates........................................... 27,564 1,774 Total debt............................................................................................................................ 589,564 Less current portion .......................................................................................................... (12,925) Long-term portion .......................................................................................................... $ 576,639 $ 551,454 (507) 550,947

Maturities for our debt including our Senior Notes at September 30, 2011 are as follows:

September 30, 2011

October 1, 2011 through December 31, 2011 ............................................................................................................................ $ 140 2012................................................................................................................................................. 473 2013................................................................................................................................................. 427 2014................................................................................................................................................. 253 2015................................................................................................................................................. 268 Thereafter .................................................................................................................................... 549,893 Total ................................................................................................................................. $ 551,454

Senior Notes -- On November 12, 2010, Frac Tech Services and Frac Tech Services, Inc., a wholly-owned subsidiary of Frac Tech Services, as co-issuers, completed a private offering of $550,000 aggregate principal amount of Senior Notes. The Senior Notes mature on November 15, 2018 and bear interest at 7.125% per annum,

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payable semi-annually in arrears on May 15 and November 15, which began May 15, 2011. The Senior Notes are unsecured and are guaranteed by Frac Tech Services' existing and future subsidiaries, subject to certain exceptions. In connection with our issuance of the Senior Notes, we incurred $13,343 of financing charges, which have been deferred and will be amortized over the expected term of the Senior Notes. The proceeds from our Senior Notes offering were used to pay off our then-existing revolving credit facility, loans from members, and certain term installment notes. Additionally, $200,000 was used as a return of capital to members. The Senior Notes are not entitled to any mandatory redemption or sinking fund. Prior to November 15, 2013, we may redeem up to 35% of the Senior Notes with proceeds of certain equity offerings at a redemption price of 107.125% of the principal amount plus accrued and unpaid interest. Prior to November 15, 2014, we may redeem some or all of the Senior Notes at a price equal to 100% of the principal amount plus a make-whole premium determined pursuant to a formula set forth in the Indenture governing the Senior Notes, plus accrued and unpaid interest. On or after November 15, 2014, we may redeem all or part of the Senior Notes at the following prices (as a percentage of principal), plus accrued and unpaid interest, if redeemed during the 12-month period beginning on November 15 of the years indicated below:

Redemption Price

2014 ................................................................................................................................................................................................... 103.563% 2015 ................................................................................................................................................................................................... 101.781% 2016 and thereafter ............................................................................................................................................................................ 100.000%

The Indenture governing the Senior Notes contains covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to incur or guarantee additional indebtedness or issue certain preferred equity; pay dividends on our equity or redeem equity or subordinated indebtedness; transfer or sell assets; make investments; incur liens; enter into transactions with our affiliates; and merge or consolidate with other companies. As of December 31, 2010 and September 30, 2011, we were in compliance with all covenants. The Indenture required us to file with the Securities and Exchange Commission within 240 days after November 12, 2010 (or July 11, 2011) a registration statement for an offer to exchange the Senior Notes and related guarantees for registered notes and guarantees with identical terms, or in certain circumstances to file a shelf registration statement covering resales of the Senior Notes and guarantees. We have not filed such registration statement and therefore are required to pay additional interest. The rate of additional interest is 0.25% per annum for the first 90-day period immediately following the deadline to file the registration statement, and such rate will increase by an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum additional interest rate of 1.0% per annum. Revolving Credit Facility -- On August 5, 2011, Frac Tech Services entered into a $100 million revolving credit facility and related security and other agreements with a syndicate of financial institutions as lenders and Royal Bank of Canada, as administrative agent (the "Revolving Credit Facility"). The Revolving Credit Facility includes a sublimit of $50 million for the issuance of letters of credit and allows for one or more swingline loans from Wells Fargo Bank, N.A. up to an aggregate amount of $20 million, provided certain conditions are met. The Revolving Credit Facility will mature on August 5, 2016. Loans under the Revolving Credit Facility are available for Frac Tech Services to borrow up to the lesser of (a) the $100 million commitment by the lenders (which may be reduced in certain circumstances) and (b) the borrowing base. The borrowing base is based on certain eligible inventory and accounts receivable of Frac Tech Services and its wholly-owned subsidiaries, with certain discounts applied, and will be redetermined from time to time. Our obligations under the credit agreement are secured by a first-priority security interest in all of Frac Tech Services' and each of its wholly-owned subsidiaries' accounts receivable, inventory and proceeds thereof. None of the assets of FTS International Holdings, LLC or FTS International, LLC are pledged as security as part of this financing. The Revolving Credit Facility is unconditionally guaranteed by each of Frac Tech Services' wholly-owned domestic restricted subsidiaries. Borrowings under the Revolving Credit Facility will bear interest, at our option, at: a rate equal to LIBOR adjusted for statutory reserve requirements, plus an applicable margin, or a rate equal to the higher of (1) the U.S. prime rate, (2) the federal funds effective rate plus 0.50% and (3) adjusted one-month LIBOR plus 1% per annum, in each case plus an applicable margin.

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Swingline loans bear interest at a rate equal to the higher of (1) the U.S. prime rate, (2) the federal funds effective rate plus 0.50% and (3) adjusted one-month LIBOR plus 1% per annum, in each case plus an applicable margin. The applicable margin for the Revolving Credit Facility is subject to change pursuant to a pricing grid based on availability under the Revolving Credit Facility. In addition, the credit agreement provides for customary commitment fees and letter of credit fees. The Revolving Credit Facility contains a number of covenants that, among other things, restrict the ability of Frac Tech Services and its restricted subsidiaries to incur additional indebtedness; create liens on assets; make investments, loans or advances; engage in mergers or consolidations; sell assets; make acquisitions; pay dividends and make distributions or repurchase their equity interests; and engage in certain transactions with affiliates. These covenants are subject to a number of qualifications and exceptions. The Revolving Credit Facility contains customary events of default, including (i) defaults under indebtedness with an aggregate principal amount exceeding $25 million that results in the acceleration of the maturity thereof, or permits the holders (or any trustee or agent) to accelerate the maturity thereof, or constitutes the failure to pay required amounts when due and (ii) the existence of unsatisfied judgments (for a period of 60 days from entry) in excess of $25 million. Revolver -- In January 2007, we entered into a senior secured revolving credit facility ("Revolver") with a group of banks to create a revolving line of credit. The original maturity date of the Revolver was January 2010. As of December 31, 2009, we were not in compliance with certain covenants and therefore we entered into an amendment and forbearance agreement and subsequently amended and restated the Revolver in its entirety in May 2010. Subsequent to this date, and prior to December 31, 2010, we paid off the Revolver in its entirety. NOTE 9 -- COMMITMENTS AND CONTINGENCIES We lease certain administrative and sales offices and operational facilities in various cities. We lease rail cars and portions of our office equipment. In addition, we rent various facilities and equipment under temporary arrangements. For the Prior Period and Current Period, our lease expense was $11,982 and $15,379, respectively. Future minimum lease payments due under noncancellable operating leases as of September 30, 2011 consist of the following:

September 30, 2011

October 1, 2011 through December 31, 2011 ............................................................................................................... $ 7,340 2012................................................................................................................................................. 26,632 2013................................................................................................................................................. 18,466 2014................................................................................................................................................. 9,611 2015................................................................................................................................................. 8,522 Thereafter .................................................................................................................................... 10,276 Total ................................................................................................................................. $ 80,847

In the ordinary course of business, we are subject to various legal proceedings and claims. Management believes that costs associated with such legal matters, if any, will not have a material adverse effect on our financial condition, results of operations, or cash flows. NOTE 10 -- TRANSACTIONS WITH RELATED PARTIES Prior to the Acquisition Transaction, transactions with related parties included charges for equipment, facilities and office leasing, reimbursement of personnel and benefits costs, equipment purchases, construction contracting, repair parts and services, materials purchases, and shared insurance policies, as well as provision of significant hydraulic fracturing services and some other minor transactions. As a result of the Acquisition Transaction described in Note 2, the entities with which we engaged in many of the transactions reflected in the table below, other than the provision of frac services and equipment purchases, ceased to be related entities as of the closing date of the Acquisition Transaction, May 6, 2011. In subsequent

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periods, we anticipate that the only significant transactions with related entities will relate to our provision of frac services to Chesapeake Energy Corporation, which beneficially owns 30% of our outstanding equity, and purchases of equipment from another related party. The amounts shown in the table below as amounts we billed to related parties for frac services were billed to Chesapeake Energy Corporation. Transactions with related parties during the three and nine months ended September 30, 2011 and 2010 are summarized as follows:

Three Months Ended September 30, 2010 2011 Nine Months Ended September 30, 2010 2011

Amounts billed to us by related parties: Construction contracting ....................................................................................... 7,157 $ 4,399 $ $ $ 15,283 Equipment purchases....................................................... 448 10,554 1,463 46,038 Leasing and overhead expenses ....................................................................................... 20 5 859 959 Equipment components and repairs ....................................................................................... 2 565 39 804 Totals ................................................................................................................. $ 4,869 $ 11,124 $ 9,518 Amounts billed to related parties: Frac services ......................................................................................................... $ 36,763 $ 99,521 $ 70,653 Supplies, equipment, and leasing ....................................................................................... 145 (2) 316 Overhead expenses and insurance ....................................................................................... 160 28 259 Totals .................................................................................................................. $ 37,068 $ 99,547 $ 71,228 $ 271,376 110 193 $ 271,679 $ 63,084

NOTE 11 -- RETIREMENT PLAN We maintain a 401(K) retirement plan. Employees may contribute a portion of their salary, up to the limits established for an individual by the IRS, to our 401(K) plan. As of September 30, 2010 we did not provide any matching contributions. Effective January 1, 2011, we began matching up to 4% of eligible employee contributions. NOTE 12 ­ OWNERSHIP-BASED COMPENSATION In August 2011, restricted securities of our parent with a value of $2,000 were granted to two members of our senior management team. The fair value is based on the fair values assigned to our parent for the Acquisition Transaction. During the period, we recognized $150 of ownership-based compensation expense as an allocation of expense from our direct parent entity. We have treated this as a non-cash contribution from our parent entity. NOTE 13 -- CONCENTRATIONS Our primary business is providing high-pressure, high-volume fracturing services to E&P companies. These services are part of the process of completing wells after they have been drilled (and determined to have found hydrocarbons). We derived approximately 41%, 40%, 41% and 36% of our revenues from our three largest customers, none of which was less than 9% of our revenues, in the Prior Quarter, Current Quarter, Prior Period and Current Period, respectively. NOTE 14 -- RECENTLY ISSUED ACCOUNTING STANDARDS In December 2010, the Financial Accounting Standards Board (the "FASB") issued an accounting standards update requiring that step 2 of the goodwill impairment test (i.e., measurement and recognition of an impairment loss) be performed if a reporting unit has a carrying value equal to or less than zero and qualitative factors indicate that it is more likely than not that a goodwill impairment exists. The provisions of this update are effective for annual reporting periods beginning after December 15, 2010. We do not expect the effects of adoption to have a significant impact on the results of our goodwill impairment testing.

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In December 2010, the FASB issued an accounting standards update relating to disclosure of supplementary pro forma information for business combinations. This guidance provides clarification on disclosure requirements and amends current guidance to require entities to disclose pro forma revenue and earnings of the combined entity as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. Qualitative disclosures describing the nature and amount of any material, nonrecurring pro forma adjustments directly attributable to the business combinations included in the reported pro forma revenue and earnings are also required. This guidance is effective for business combinations with acquisition dates on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. This pronouncement will require additional disclosure in the event of a business combination but will not have a material impact on our financial condition and results of operations. In May 2011, the FASB issued an accounting standards update related to fair value measurements and disclosures to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with US GAAP and International Financial Reporting Standards. This guidance includes amendments that clarify the intent about the application of existing fair value measurement requirements, while other amendments change a principle or requirement for measuring fair value or for disclosing information about fair value measurements. Specifically, the guidance requires additional disclosures for fair value measurements that are based on significant unobservable inputs. The updated guidance is to be applied prospectively and is effective for our interim and annual periods beginning January 1, 2012. The adoption of this guidance is not expected to have a material impact on our financial condition, results of operations or cash flows. In June 2011, the FASB issued an accounting standards update relating to the presentation of other comprehensive income. The accounting update eliminates the option to present components of other comprehensive income as part of the statement of stockholders' equity. Instead, companies must report comprehensive income in either a single continuous statement of comprehensive income (which would contain the current income statement presentation followed by the components of other comprehensive income and a total amount for comprehensive income), or in two separate but consecutive statements. This guidance is effective for our fiscal year beginning January 1, 2012. This guidance may impact our presentation of other comprehensive income, but will not impact our financial condition, results of operations or cash flows. In September 2011, the FASB issued an accounting standards update relating to testing goodwill for impairment. Under this new standard, entities testing goodwill for impairment now have an option of performing a qualitative assessment before having to calculate the fair value of a reporting unit. If an entity determines, on the basis of qualitative factors, that the fair value of the reporting unit is more-likely-than-not less than the carrying amount, the existing quantitative impairment test is required. Otherwise, no further impairment testing is required. This guidance is effective for reporting periods beginning after December 15, 2011, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our financial condition, results of operations or cash flows.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (In $000's, unless indicated otherwise) The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this report and the information in our Annual Report for the year ended December 31, 2010, including information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." Overview This discussion and analysis relates to the three and nine months ended September 30, 2010 (the "Prior Quarter" and the "Prior Period", respectively) and the three and nine months ended September 30, 2011 (the "Current Quarter" and the "Current Period", respectively). We are a leading provider of high-pressure hydraulic fracturing services to exploration and production companies in the United States. We have particular expertise in stimulating production of oil and natural gas from wells in shale and other unconventional formations that require extensive fracturing. We are vertically integrated. · · · · We manufacture many of the components of our hydraulic fracturing units, including all of the hydraulic pumps we use in our operations, and assemble all of the hydraulic fracturing units used in our fleets. We produce from our own mines and processing plants the majority of the raw sand and resin-coated sand we use as proppants. We formulate and blend a portion of the chemicals we use in fracturing fluids. We transport most of the raw sand and other products to job sites by rail and truck using our distribution network.

This vertical integration allows us to provide superior customer service, rapidly adapt to changing market conditions, maintain and control the quality of our equipment and products, and manage costs. We believe our vertical integration has been one of the key factors that have facilitated our rapid growth since 2004. We believe we are one of the largest hydraulic fracturing service companies in the United States, based on total horsepower of our fleets. We believe we have one of the largest market shares of any hydraulic fracturing service provider in the Haynesville Shale, the Eagle Ford Shale and the Marcellus Shale, based on number of fleets. Currently, we have fleets operating out of 12 active district offices. During the first half of 2011, we opened a new district office in Elk City, Oklahoma to service customers in the Granite Wash formation and a new district office in Minot, North Dakota to service customers in the Bakken Shale. We have deployed two fleets to our Elk City district and three fleets to our Minot district. In addition, we have redeployed two fleets from the Haynesville Shale to other more active shale locations. We anticipate deploying fleets in additional oil and natural gas producing areas in 2011, which may include the Utica Shale in Ohio. The information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report includes additional information about our operations, our key accomplishments in recent periods, recent market trends affecting our business, the principal sources of our revenues and the principal costs we incur in conducting our business. Reclassifications Certain reclassifications from 2010 amounts have been made to conform to the three and nine months ended September 30, 2011 financial statement presentation with no effect on previously reported net income, retained earnings, or cash flows from operations. For the nine months ended September 30, 2010, we reclassified: $79 million of depreciation and depletion expense from costs of revenues and $1 million of amortization expense from net other expense to depreciation, depletion and amortization; and $17 million of selling and administrative costs into costs of revenues. Sale of Controlling Interest On May 6, 2011, World Investment Group, LLC ("WIG"), a majority investor in our parent holding company, Frac Tech Holdings, LLC, sold all of its membership interests in Frac Tech Holdings to Frac Tech International,

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LLC, a newly-formed limited liability company organized by an investor group (the "Acquisition Transaction"). Subsequent to the Acquisition Transaction, Frac Tech International, LLC changed its name to FTS International, LLC ("FTI") and Frac Tech Holdings, LLC changed its name to FTS International Holdings, LLC ("FTH"). In connection with the Acquisition Transaction, FTI entered into a $1.7 billion senior secured credit facility and incurred $1.5 billion in term loan indebtedness under senior secured credit facility to finance the Acquisition Transaction (the "Senior Secured Term Loan"). The Senior Secured Term Loan matures in 2016. FTI intends to fund payments to the lenders under the Senior Secured Term Loan in part with distributions from Frac Tech Services, and we anticipate that Frac Tech Services will be required to make distributions to FTI for that purpose on a quarterly basis. Such distributions will be subject to the limitations contained in the Indenture. The Acquisition Transaction constituted a Change of Control (as defined in the Indenture). As a result of the occurrence of the Change of Control, as required by the Indenture, we made an offer to purchase all outstanding Senior Notes at a price equal to 101% of the outstanding principal amount of the Senior Notes plus accrued and unpaid interest to, but not including, the date of purchase (the "Offer to Purchase"). We commenced the Offer to Purchase on May 6, 2011. On June 7, 2011, we announced that $320 principal amount of the outstanding Senior Notes were validly tendered and accepted for purchase in the tender offer. We recorded an insignificant loss on this extinguishment of debt, which is included in interest expense. See Note 2 to the consolidated financial statements for additional information about the Acquisition Transaction and the Offer to Purchase. Withdrawal of Proposed Public Offering As stated in our 2010 Annual Report, we filed a Registration Statement on Form S-1 in December 2010 for an initial public offering of our common stock. Following the closing of the Acquisition Transaction, we withdrew the Registration Statement, which had not been declared effective. How We Evaluate Our Operations A key financial and operating measurement that our management uses to analyze and monitor the operating performance of our business is Adjusted EBITDA, which consists of net income before interest, income taxes, depreciation, amortization and gain or loss on sale of assets, as further adjusted to add back amounts charged to income for non-cash ownership-based compensation, impairment of certain service equipment in 2010 and other nonrecurring items. We also evaluate our performance using certain key operating data relating to the utilization of our fracturing fleets and the level of activity in our business, based on, for example, the number of wells we service and the number of fracturing stages we perform. The following table shows certain operating data for the periods indicated:

Three Months Ended September 30, 2010 2011 Nine Months Ended September 30, 2010 2011

Adjusted EBITDA (1) ................................................................................. $ 162,689 $ 251,885 $ 325,641 $ 692,542 Number of wells fractured ................................................................................. 314 470 979 1,331 Total fracturing stages ................................................................................. 2,966 4,794 7,219 12,386 Average revenue per stage ................................................................................. $ 118,546 $ 132,870 $ 110,657 $ 138,604 Horsepower (end of period) ................................................................................. 875,500 1,452,000 875,500 1,452,000 Number of fleets deployed (end of period) (2)................................................................................. 22 34 22 34

____________

(1) "Adjusted EBITDA" is a non-GAAP financial measure. See below for discussion of this measure and a reconciliation to * amounts reported under US GAAP.

We use the operating metrics shown above as measures of performance, as is typical in the hydraulic fracturing industry. We also use these metrics in forecasting our future business performance. Our management also evaluates and manages the performance of our business by comparing our current actual results against hydraulic fracturing industry trends. Industry-specific trends and internal productivity analysis allow us to gauge our performance regarding margin expectations and operating efficiencies. Resources are then allocated throughout our company in order to achieve our expected hydraulic fracturing results. "Adjusted EBITDA" is a non-GAAP financial measure that we define as net income before interest, taxes, depreciation, amortization and gain or loss on sale of assets, as further adjusted to add back amounts charged to

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income for non-cash ownership-based compensation, impairment of service equipment in fiscal year 2010 and other nonrecurring items. Adjusted EBITDA, as used and defined by us, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with US GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with US GAAP. However, our management believes Adjusted EBITDA may be useful to an investor in evaluating our operating performance because this measure: · is widely used by investors in the oilfield services industry to measure a company's operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company to company depending upon accounting methods, book value of assets, capital structure and the method by which assets were acquired, among other factors; helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and asset base from our operating structure; and is used by our management for various purposes including as a measure of performance of our operating entities, and in presentations to our board of managers as a basis for strategic planning and forecasting.

· ·

There are significant limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect our net income or loss, and the lack of comparability of results of operations of different companies. The following table reconciles our net income, the most directly comparable US GAAP financial measure, to Adjusted EBITDA:

Three Months Ended September 30, 2010 2011 Nine Months Ended September 30, 2010 2011

Net income....................................................................... 128,886 192,208 Interest expense, net....................................................................... 2,033 9,550 Income taxes....................................................................... 1,197 1,225 Depreciation and amortization....................................................................... 26,848 48,096 (1) Impairment of service equipment .......................................................... 3,701 Loss on disposal of assets....................................................................... 962 126 Ownership-based compensation.......................................................... 150 M iscellaneous revenue (2)....................................................................... (102) Adjusted EBITDA....................................................................... $ 162,689 (306)

$ 219,948 13,562 2,882 79,807 9,352 464 (374) $ 325,641

$ 512,365 29,488 4,006 126,661 2,665 18,315 (958) $ 692,542

$ 251,885

____________

(1) The amount shown in the table above for impairment of service equipment relates to a charge taken during fiscal year 2010 resulting from increased use of our equipment in demanding shale reservoirs, which required us to replace the equipment earlier than its originally estimated useful life. (2) Miscellaneous revenue consists principally of rental income and amortization of deferred gain.

Results of Operations Quarter Ended September 30, 2010 Compared to Quarter Ended September 30, 2011 The following table sets forth unaudited results of operations data as a percentage of revenues for the periods shown:

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Three Months Ended September 30, 2010 Percent of Amount Revenue

Three Months Ended September 30, 2011 Percent of Amount Revenue

Difference Dollar Percent

Revenues ................................................................................. $ 354,323 $641,890 $ 287,567 Cost of revenues ................................................................................. 52.8 % 174,170 49.2 % 338,896 164,726 Selling and administrative costs ................................................................................. 21,165 6.0 % 51,259 8.0 % 30,094 Depreciation and amortization ................................................................................. 26,848 7.6 % 48,096 7.5 % 21,248 0 Income from operations ................................................................................. % 132,140 37.3 % 203,639 31.7 71,499 Other income (expense): Interest expense, net .................................................................................% (2,033) 0.6 % (9,550) 1.5 (7,517) Other ................................................................................. (24) 0.0 % (656) 0.1 % Net other expenses ................................................................................. % (2,057) 0.6 % (10,206) 1.6 Income before income taxes ................................................................................. 130,083 36.7 % 193,433 30.1 % Provision for income taxes ................................................................................. 1,197 0.3 % 1,225 0.2 % Net income ................................................................................. $ 128,886 36.4 % $192,208 29.9 % $ (632) 0 (8,149) 63,350 28 0 63,322

81.2% 94.6 % 142.2 % 79.1 % 54.1 % 369.7 % NA 396.2 % 48.7 % 2.3 % 49.1 %

Revenues. Revenues increased by $287.6 million, or 81.2%, from $354.3 million for the Prior Quarter to $641.9 million for the Current Quarter. This improvement was due to an increase in demand for our services resulting primarily from an increase in the horizontal rig count and drilling activity in our markets. The United States land horizontal rig count increased from 919 to 1,161 from September 30, 2010 to September 30, 2011. This increased demand resulted in a significant increase in the volume of activity. This increased activity, particularly in harsh shale environments in which we believe we have a competitive advantage, also allowed us to increase our prices. We estimate that over 75% of the increase in our revenues was due to increased activity. Cost of Revenues. Cost of revenues increased by $164.7 million, or 94.6%, from $174.2 million in the Prior Quarter to $338.9 million in the Current Quarter. The increase in cost of revenues was generally due to our overall increase in operating activity, and the most significant increases were in the costs of products (such as sand and chemicals, which had increases in both volume and cost of materials), freight (which had increases in both volume of freight and variable costs such as demurrage) and fuel. To a lesser extent, the costs associated with direct labor increased with higher activity but were relatively consistent between periods on a per-fleet, per-shift basis. Our operations in harsher geological environments such as the Haynesville and Marcellus Shales have resulted in higher levels of stress on our fracturing units, particularly the fluid ends, which is the part of the pump through which the fracturing fluid is expelled under high pressure. As a result, we recorded a $3.7 million impairment of certain service equipment due to retirement earlier than its originally estimated useful life in the Prior Quarter. Selling and Administrative Costs. For the Current Quarter, selling and administrative costs increased by $30.1 million, or 142.2%, from $21.2 million to $51.3 million. This increase was due to an increase in costs associated with our increased activity level and the overall growth of our operations, as well as a $9.7 million increase in legal, professional and consulting fees. Depreciation and Amortization. Depreciation and amortization increased by $21.2 million, or 79.1%, from $26.8 million for the Prior Quarter to $48.1 million for the Current Quarter, primarily due to an increase in the number of fracturing units we manufactured and used in our operations during the Current Period. As a percentage of revenue, depreciation declined from 7.6% in the Prior Quarter to 7.5% in the Current Quarter, as a result of the significant increase in revenue and the relatively fixed nature of depreciation. Net Other Expenses. Net other expenses increased by $8.1 million, or 396.2%, from $2.1 million for the Prior Quarter to $10.2 million for the Current Quarter. This increase was due primarily to higher levels of debt after the issuance of our Senior Notes in November 2010. .

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Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2011 The following table sets forth unaudited results of operations data as a percentage of revenues for the periods shown:

Nine Months Ended September 30, 2010 Percent of Amount Revenue Amount Nine Months Ended September 30, 2011 Percent of Revenue Dollar Percent Difference

Revenues ................................................................................. $ 806,197 $ 1,725,885 $ 919,688 Cost of revenues ................................................................................. 432,542 53.7 % 885,338 51.3 % 452,796 Selling and administrative costs ................................................................................. 57,366 7.1 % 166,320 9.6 % 108,954 Depreciation and amortization ................................................................................. 79,807 9.9 % 126,661 7.3 % Income from operations ................................................................................. % 236,482 29.3 % 547,566 31.7 Other income (expense): Interest expense, net ................................................................................. % (13,562) 1.7 % (29,488) 1.7 Other ................................................................................. (90) 0.0 % (1,707) 0.1 % Net other expenses .................................................................................1.8 % (13,652) 1.7 % (31,195) Income before income taxes .................................................................................% 222,830 27.6 % 516,371 29.9 Provision for income taxes ................................................................................. 2,882 0.4 % 4,006 0.2 % Net income ................................................................................. $ 219,948 27.3 % $ 512,365 29.7 % 46,854 0 311,084 (15,926) (1,617) 0 (17,543) 293,541 1,124 0 $ 292,417

114.1% 104.7 % 189.9 % 58.7 % 131.5 % 117.4 % NA 128.5 % 131.7 % 39.0 % 132.9 %

Revenues. Revenues increased by $919.7 million, or 114.1%, from $806.2 million for the Prior Period to $1,725.9 billion for the Current Period. This improvement was due to an increase in demand for our services resulting primarily from an increase in the horizontal rig count and drilling activity in our markets. The United States land horizontal rig count increased from 919 to 1,161 from September 30, 2010 to September 30, 2011. This increased demand resulted in a significant increase in the volume of activity. This increased activity, particularly in harsh shale environments in which we believe we have a competitive advantage, also allowed us to increase our prices. We estimate that over 75% of the increase in our revenues was due to increased activity. Cost of Revenues. Cost of revenues increased by $452.8 million, or 104.7%, from $432.5 million in the Prior Period to $885.3 million in the Current Period. The increase in cost of revenues was generally due to our overall increase in operating activity, and the most significant increases were in the costs of products (such as sand and chemicals, which had increases in both volume and cost of materials), freight (which had increases in both volume of freight and variable costs such as demurrage) and fuel. To a lesser extent, the costs associated with direct labor increased with higher activity but were relatively consistent between periods on a per-fleet, per-shift basis. Our increased operations in harsher geological environments such as the Haynesville and Marcellus Shales have resulted in higher levels of stress on our fracturing units, particularly the fluid ends, which is the part of the pump through which the fracturing fluid is expelled under high pressure. As a result, we recorded a $9.4 million impairment of certain service equipment in the Prior Period due to retirement earlier than its originally estimated useful life. Selling and Administrative Costs. For the Current Period, selling and administrative costs increased by $109.0 million, or 189.9%, from $57.4 million to $166.3 million. This increase was due to an increase in costs associated with our increased activity level and the overall growth of our operations; $18.2 million of ownershipbased compensation expense and management bonuses of $13.1 million as a result of the change of control; $23.4 million increase in legal, professional and consulting fees; and $4.8 million in other management and employee bonuses. Depreciation and Amortization. Depreciation and amortization increased by $46.9 million, or 58.7%, from $79.8 million for the Prior Period to $126.7 million for the Current Period, primarily due to an increase in the number of fracturing units we manufactured and used in our operations during the Current Period. As a percentage of revenue, depreciation declined from 9.9% in the Prior Period to 7.3% in the Current Period, as a result of the significant increase in revenue and the relatively fixed nature of depreciation. Net Other expenses. Net other expenses increased by $17.5 million, or 128.5%, from $13.7 million for the Prior Period to $31.2 million for the Current Period. This increase was due primarily to higher levels of debt after the issuance of our Senior Notes in November 2010.

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Income Taxes. Income taxes increased by $1.1 million, from $2.9 million for the Prior Period to $4.0 million for the Current Period. This increase was the result of higher franchise taxes paid in the state of Texas, which are generally based on gross revenues, less certain deductions. Liquidity and Capital Resources Historically, we have met our liquidity needs principally from cash flows from operating activities, borrowings under bank credit agreements, equity investments by Chesapeake Energy Corporation, equipment financings and other borrowings. On November 12, 2010, we consummated a private offering of our 7.125% Senior Notes due 2018, from which we obtained net proceeds of approximately $537.0 million. We used approximately $105.8 million of such proceeds to repay indebtedness and distributed $200.0 million of such proceeds to our thencurrent members. On August 5, 2011, we entered into a new revolving credit facility. This facility allows us to borrow up to the lesser of (a) $100 million or (b) the borrowing base, which amount is calculated on certain of our eligible accounts receivable and inventory. The facility includes a sublimit of $50 million for the issuance of letters of credit and allows for swingline loans up to an aggregate amount of $20 million. As of November 14, 2011, available borrowings under this facility were $100 million. Our principal uses of cash are to fund capital expenditures, primarily for expanding and maintaining our fleets and acquiring or expanding facilities, to fund operations and to service outstanding debt. Additionally, since we are treated as a partnership for income tax purposes, we have historically distributed cash to our members for payment of personal income taxes on taxable income, if any, generated by us. During 2011, our primary sources of cash have been and, we expect will continue to be, cash flows generated from our operations. We may also pursue additional debt or equity financings in the public or private markets in the future. We believe that cash generated from operations and available financing arrangements will be sufficient to meet working capital requirements, anticipated capital expenditures and scheduled debt payments for at least the next 12 months. Our ability to satisfy debt service obligations, to fund planned capital expenditures and to make any acquisitions will depend upon our future operating performance, which will be affected by prevailing economic conditions, market conditions in the E&P industry and financial, business and other factors, many of which are beyond our control. Cash Flows The table below summarizes our cash flows for the nine months ended September 30, 2010 and 2011.

Nine Months Ended September 30, 2010 2011

Cash flows from operating activities ....................................................................................... $ 201,570 Cash flows from investing activities ....................................................................................... $ (113,173) Cash flows from financing activities ....................................................................................... $ (80,773) Opening cash.................................................................................................. 26,039 $ Closing cash..................................................................................................$ 33,663

$ $ $ $ $

505,527 (361,524) (287,369) 291,781 148,415

Cash Flows from Operating Activities Cash provided by operating activities was $201.6 million for the Prior Period compared to $505.5 million for the Current Period. This increase was due primarily to a $292.4 million increase in net income. Cash Flows from Investing Activities For the Prior Period net cash used in investing activities was $113.2 million compared to $361.5 million in the Current Period. This increase is due to increased purchases of property and equipment to support our increasing operations and sand production capacity. Cash Flows from Financing Activities Net cash used in financing activities was $80.8 million for the Prior Period compared to $287.4 million for the Current Period. Net cash used in financing activities for the Prior Period consisted primarily of a net repayment of $147.9 million on our prior revolving credit facility, a net repayment of long-term debt of $4.0 million and a $100

20

million contribution from our members. Net cash used in financing activities in the Current Period consisted primarily of a $125.6 million distribution to our former members, $134.6 million distribution to current members and a $27.6 million repayment of long-term debt. Capital Expenditures Our policy is to invest in growth through capital expenditures, principally for the fabrication, assembly and maintenance of our hydraulic fracturing units, including the manufacture of the hydraulic pumps and the purchase of other component parts used in the fabrication and assembly of those units, such as engines, transmissions and radiators, facility acquisitions and the purchase of other equipment we use in our business, including blenders and sand kings. We may also consider acquiring other companies from time to time as opportunities arise. Capital expenditures amounted to $116.2 million and $385.5 million in the Prior Period and Current Period, respectively. This increase is due primarily to a significant increase in production of fracturing units, as well as expansion of our capacity to produce raw sand and resin-coated sand and to manufacture high-pressure pumps. We intend to continue increasing our raw sand and resin-coated sand production capacity and high pressure pump manufacturing capacity during 2011. For these reasons, we expect our capital expenditures for the year ended December 31, 2011 to be significantly higher than our capital expenditures in 2010. We may increase or decrease the number of fracturing units we manufacture and otherwise adjust our capital expenditure plans during any period based on market conditions or other factors. Contractual Commitments and Obligations In the normal course of business, we enter into various contractual obligations that impact or could impact our liquidity. The following table summarizes our material obligations as of September 30, 2011, with projected cash payments in the years shown.

Payments Due by Period October 1 December 31, 2011 2012-2013 2014-2015 140 20,219 7,340 27,699 $ 901 88,729 45,098 $ 521 89,382 18,133 -

Total Long-term debt: 7.125% Senior Notes......................................................... $ 549,680 $ Other long-term debt........................................ 1,774 Interest.............................................. 332,319 Operating leases............................................................. 80,847 Purchase obligations.............................................. Total $ 964,620 $

Thereafter $ 549,680 212 133,989 10,276 $ 694,157

$ 134,728

$ 108,036

Off-Balance Sheet Arrangements We have no off-balance sheet arrangements, other than normal operating leases, that have or are likely to have a current or future material effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources. Critical Accounting Policies Our consolidated financial statements are prepared in accordance with US GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from these estimates. There have been no material changes to the critical accounting policies disclosed in our Annual Report for the year ended December 31, 2010. Recent Accounting Pronouncements See Note 14 to the consolidated financial statements for a discussion of recently issued accounting pronouncements.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK At September 30, 2011, we had no outstanding variable interest rate debt and, therefore, were not subject to significant market interest rate risk impacting our future results of operations, financial position and cash flows. As our operations are currently conducted entirely within the United States, we also had no significant exposure to foreign currency exchange rate risk. LEGAL PROCEEDINGS In the ordinary course of business, we are subject to various legal proceedings and claims. Management believes that costs associated with such legal matters, if any, will not have a material adverse effect on our financial condition, results of operations, or cash flows. RISK FACTORS The information set forth elsewhere in this report, including under "Management's Discussion and Analysis of Financial Condition and Results of Operations," and under the heading "Risk Factors" in our Annual Report for the year ended December 31, 2010 should be considered carefully in making any investment decisions with respect to our securities. These risks could materially affect our ability to meet our obligations under the Senior Notes. You could lose all or part of your investment in, and fail to achieve the expected return on, the Senior Notes. There may be additional risks that are not presently material or known. You should carefully consider all information set forth in this Quarterly Report and in our 2010 Annual Report.

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