July 26, 2006 — Ipsco Inc. announced net income of $156.4 million on record sales of $893.6 million for the second quarter and net income of $307.1 million on sales of $1796.5 million for the first six months of 2006.

Second Quarter Results—The $156.4 million net income ($3.25 per diluted share) compares to net income of $126.9 million ($2.57 per diluted share) for the second quarter of 2005 and $150.7 million ($3.12 per diluted share) in the first quarter of 2006. Sales were a second quarter record $893.6 million, an increase of 29.9% ($205.9 million) over the same quarter last year and down only 1.0% ($9.3 million) from the record first quarter.

Total shipments were 1,001,000 tons, the company's second-highest quarterly shipment level, an increase of 197,500 tons compared to last year and 4,400 tons lower than the record first quarter. Ipsco's average product price of $893 per ton was up $37 per ton from a year ago and $5 per ton lower than the record set in the first quarter this year.

"The continued strength in our plate markets, high levels of large diameter pipe shipments and record U.S. energy tubular sales offset the impact of the normal spring slowdown for Canadian small diameter energy tubular shipments," said David Sutherland, President and Chief Executive Officer. "Our strategy to be in several key steel markets continues to provide strong and stable financial results for our shareholders."

Steel mill product shipments were a record 702,100 tons, an increase of 21.1% over last year and 6.6% over the prior quarter. Tubular shipments of 298,900 tons, driven by greater large diameter sales volumes and strong U.S. tubular shipments, reflect a 33.7% increase over the prior year. Tubular shipments declined 13.9% from the prior quarter as the level of large diameter pipe and U.S. tubular shipments only partially offset the seasonal decline of Canadian OCTG shipments.

Gross income was $261.6 million (29.3% of sales), which compares to gross income of $230.4 million (33.5% of sales) in the second quarter of 2005. The decline in margins as a percent of sales was driven by higher steel mill input costs and higher coil costs for the tubular product lines. Compared to the prior quarter, margins declined from 31.0% due to higher average large diameter pipe costs and a less favorable product mix. Operating income in the second quarter was $243 per ton compared to $267 per ton in the second quarter of 2005 and $246 per ton in the prior quarter.

Outlook—Ipsco says it expects continued strong demand for steel mill products for the balance of 2006. Ipsco's steel mill capacity is fully committed through the third quarter of this year, and the company anticipates similar demand when it opens the fourth quarter order book. Operations are expected to maintain strong performance, as scheduled maintenance outages are minimal during the remainder of the year.

Ipsco says it also expects energy prices to remain high and therefore continue to drive high drilling activity and demand for OCTG products. The company says its large diameter spiral pipe facilities are booked at full capacity through the third quarter of 2007.

The company says it expects margins to be stable for the last half of the year. Excluding the effects of foreign exchange gains or losses and share price volatility, and assuming an effective tax rate of 38.3%, Ipsco forecasts third quarter 2006 earnings to be in the range of $3.30 to $3.50 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.