E.S.I. Environmental Sensors Inc.

E.S.I. Environmental Sensors Inc.

June 01, 2006 09:30 ET

ESI Announces Master Supplier Agreement with EnCana

VICTORIA, BRITISH COLUMBIA--(CCNMatthews - June 1, 2006) - ESI Environmental Sensors Inc. (TSX VENTURE:ESV) is pleased to announce that the Company has signed a Master Supplier Agreement with EnCana (www.EnCana.com) for ESI products and services. EnCana is among the largest holders of oil and gas properties in North America.

Further to the announcement made on May 15, 2006, ESI has commenced delivery of the first Flo.Point instruments sold to EnCana. The first units will be deployed in a heavy oil application. Additional instruments have been ordered and are currently in production. Their delivery is expected to follow in the coming weeks. These first orders from EnCana have resulted from a successful trial project undertaken with the client over several months. The project included installation and testing of the Flo.Point instrument in a heavy oil application with hydrocarbon to water ratio of 60/40.

"The high level of interest developing in Flo.Point presents an exciting opportunity for ESI in Alberta," said Paul Davis, who is based in Calgary and is leading ESI's Oil & Gas Product Sales. "In the coming months, we do anticipate a requirement to have Flo.Point instruments available for lease as well as for sale. Flo.Point data gives oil companies instant access to water management information that can be used to optimize individual well performance, provides cost savings in energy and a fast payback."

Flo.Point's unique features address EnCana applications at several of its oil properties. ESI is currently testing an enhanced version of Flo.Point, which will address additional opportunities with this client as well as others working in high-pressure oil well applications.

Subject to regulatory approval, the Company has granted a combined total of 625,000 stock options to the Company's directors, officers and employees. The options can be exercised for three years at an exercise price of $1.00.

About Flo.Point

Flo.Point™ is a revolutionary in-line water measurement sensor that measures water content in a hydrocarbon stream from 0-100%. Flo.Point can measure minimal amounts of water in a hydrocarbon stream over the entire volume of fluid flow. Full flow measurement makes Flo.Point technology applicable to many industries where there is a requirement to detect and measure water content in almost any liquid mixture.

About EnCana

With an enterprise value of over US $50 billion, EnCana is one of North America's leading natural gas producers and is among the largest holders of gas and oil resource lands onshore North America and is a technical and cost leader in the in-situ recovery of oil sands bitumen.

About ESI

ESI is a leading developer and manufacturer of patented and proprietary systems for water management. ESI products have successfully been introduced into over 40 countries to manage irrigation systems, monitor water quality, the integrity of landfill covers and most recently in the oil and gas sector to measure the volumetric presence of water pumped from producing oil wells. Environmental managers and scientists have adopted ESI proprietary technology because of its accuracy, ease of use and ability to operate in challenging conditions. ESI is publicly traded on the TSX Venture Exchange under the symbol "ESV". Further information about ESI may be obtained through the Company's new website at www.esica.com.

On behalf of the Board

Gail Gabel, Director

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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