April 27, 2006 — Ipsco Inc. announced net income of $150.7 million on record sales of $902.9 million for the first quarter of 2006.

The $150.7 million net income ($3.12 per diluted share) compares to net income of $154.8 million ($3.06 per diluted share) for the first quarter of 2005 and $170.2 million ($3.52 per diluted share) in the fourth quarter of 2005. Sales, a record $902.9 million, reflect an increase of 17.8% ($136.2 million) over the same quarter last year and 5.9% ($50.7 million) over the prior quarter.

"Ipsco continues to generate industry leading results based on the sustained strength in its core markets for plate and energy sector products, operating consistently at a high rate of profitability," said David Sutherland, President and CEO. "Over the past two years Ipsco's operating income has averaged $246 per ton, a mark which ranks at the top of our industry."

Total shipments for the quarter were 1,005,000 tons, a new quarterly record for Ipsco. Total shipments reflect an increase of 150,000 tons compared to last year and 52,000 tons higher than the prior quarter. Both steel mill product and tubular shipments set new quarterly records. Steel mill product shipments of 658,000 tons increased 6.5% over last year and 7.1% over the prior quarter while tubular shipments of 347,000 tons increased 46.0% over the prior year, primarily due to greater large diameter shipments. Tubular shipments were 2.4% greater than the prior quarter. Ipsco's composite first quarter product price of $898 per ton was also a new quarterly record and was up $2 per ton from a year ago and $4 per ton higher than the prior quarter.

"We are pleased with the strength and sustained demand for Ipsco's products. The record sales levels experienced this quarter can be attributed not only to the ongoing strength of the plate, energy tubular and large diameter pipe markets, but also to the execution of our strategy. This strategy includes operational excellence and the development of strong relationships with significant customers in the markets we serve, as reflected in recent independent customer satisfaction surveys," said David Sutherland. "These relationships continue to grow as we further enhance our asset base to meet customer needs."

Gross income for the quarter was $279.5 million. Gross income as a percent of sales was 31.0% in the first quarter of 2006 versus 34.9% in the first quarter of 2005. The comparative decline was driven by lower average steel mill product selling prices, higher steel mill input costs, and higher tubular product costs. Compared to the prior quarter, margins improved slightly from 30.3% based on higher average pricing.

Selling, general and administration expenses were $32.4 million for the quarter, $14.0 million higher than the same period last year and $6.6 million higher than the prior quarter. Ipsco adopted FAS 123(R) Share-Based Payment in January of 2006. The impact of share price appreciation and adoption of the new accounting standard impacted pre-tax earnings by $10.0 million ($0.13 per diluted share) compared to the prior year and $8.1 million ($0.10 per diluted share) compared to the prior quarter.

The first quarter 2006 effective tax rate of 39% was significantly higher than the prior year and prior period. The higher effective tax rate impacted net earnings by $0.15 and $0.72 per diluted share as compared to those periods respectively. As compared to last year, the first quarter earnings benefited by $0.14 per diluted share from share repurchase activity during 2005.

Operating income in the first quarter was $246 per ton compared to $291 per ton in the first quarter of 2005 and $244 per ton in the prior quarter. Ipsco generated $120.1 million cash from operations in the quarter.

Outlook—Ipsco expects to see robust end user demand for steel mill products for all of 2006. Ipsco's steel mill capacity is fully committed through the second quarter. The favorable pricing environment (which has been better than previously anticipated) will be partially offset by increased costs. Operations are expected to maintain strong performance as scheduled maintenance outages are minimal during the year.

Ipsco says it expects high oil and gas prices to continue to drive high rig counts and demand for OCTG products. First quarter 2006 rig counts were 35% higher in Canada and 18% higher in the U.S. than first quarter of last year. North American energy tubular demand is anticipated to be at the highest levels that weather conditions and rig availability will allow for all of 2006. In addition, the company’s spiral pipe facilities are booked at full capacity through the third quarter of 2007.

Ipsco also anticipates that its second quarter energy tubular sales volumes will experience the normal seasonal reduction as a result of the spring thaw and road restrictions in Western Canada. However, due to the strong market conditions the company is running all small diameter pipe mills at capacity in order to meet customer needs for product following spring break up. Excluding foreign exchange gains or losses and assuming an effective tax rate of 39%, the company forecasts second quarter 2006 earnings to be in the range of
$2.60 to $2.80 per diluted share.

Ipsco operates steel mills at three locations and pipe mills at six locations in the United States and Canada. As a low cost North American steel producer, Ipsco has a combined annual steelmaking capacity of 3,500,000 tons. The Company's tubular facilities produce a wide range of tubular products including line pipe, oil and gas well casing and tubing, standard pipe and hollow structurals. Steel can also be further processed at Ipsco's five temper leveling and coil processing facilities.