Kinetex Resources Corporation
TSX VENTURE : KTX

Kinetex Resources Corporation

August 25, 2009 09:30 ET

Kinetex Announces Second Quarter Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 25, 2009) - Kinetex Resources Corp. (TSX VENTURE:KTX) (the "Company" or "Kinetex") is pleased to announce its consolidated operating and financial results for the second quarter ended June 30, 2009.

Readers are encouraged to view the Company's Interim Financial Statements and accompanying Management Discussion and Analysis on the Company's website and SEDAR at www.sedar.com.

Highlights of Second Quarter activity

During the quarter ended June 30, 2009 the Company has enjoyed steady growth, achieving sales of $3,654,211, an improvement of 2.2% over Q2-2008 and of 4.8% over Q1-2009. The Company is also pleased to announce that it has achieved positive net income of $51,478. This is the first profitable quarter in the history of the Company. Profitability was achieved through the increase in revenues, improvements in gross margin and reductions of costs. Management believes these changes will position the Company for profitable operations and expansion in the future. The amortization charge for the quarter totaled $739,574 and stock-based compensation amounted to $61,133. The Company's cash resources as at June 30, 2009 were $262,061. In addition the Company had access to bank financing to meet its operating needs and to assist in acquiring fixed assets.

"We are very pleased with the ability of the company to improve its financial performance in the face of one of the toughest markets in recent memory," said Gil Schneider, Chairman and CEO of Kinetex Resources Corp. "Our goal is to position the company for strong growth as the economy recovers and confidence returns to the market."

"Our diversification into mining and into Latin America, in addition to our leadership in adopting new technologies has enabled us to weather the current downturn," added Leonard Van Betuw, CEO of Kinetex Multi-Component Services, "We will continue to evaluate, develop and adopt new technologies to maintain our leadership."

The Company reported top line revenue of $3,658,211 for the quarter, which was in line with management's expectations. While energy and resource exploration and development activity in Western Canada is well below historical levels (Industry sources estimate that exploration expenses in Canada alone have declined by almost 50% in 2009), this has not had an adverse effect on the Company's performance to date, largely due to a strong presence in South America where activity remains strong. The Company has established through its wholly owned Colombian subsidiary (Kinetex Sucursal Colombia Inc) a strong presence in Colombia where the Company is advantaged with key management personnel fluent in Spanish and familiar with local business culture.

The Company continues to achieve strong gross margins of more than 45% in both the last Quarter and in the YTD, these are higher than our previously stated target of 30-40%. The Company continues to focus on sustainable growth and the ongoing strengthening of its operations and remains confident that it is positioned to exploit its strengths.

On June 4, 2009, the Company announced a record of committed work contracts in excess of $20 million. These contracts are broadly spaced among the Company's business segments in energy and resource exploration, with notably strong activity in South America. The work programs will commence in July 2009 and are scheduled to be completed by February 2010. The Company will receive progress draws throughout the duration of the programs as work progresses. The Company also announced additional solicitations currently under development or negotiation exceeding $45 million for 2009/2010.

Shareholders are cautioned that, while management remains optimistic pertaining to future awarded prospects, there can be no guarantee or assurance that the Company will be the successful bidder in any or all of these solicitations.

Outlook for 2009

Kinetex Resources Corporation is pleased to provide an overview of its activities and plans for expansion in 2009 for its subsidiary, Kinetex. The Company reports excellent progress in the first half which bodes well for the balance of 2009. Kinetex currently has 3 crews in the field. As previously announced, the bid book remains strong with over $45 million in active solicitations.

A key strength of the Company is its use of digital 3C multi-component services - the superiority of multi-component seismic acquisition continues to be apparent as demonstrated by strong demand.

The infrastructure expansion that has taken place over the past three years is now providing a solid foundation for future growth and has enabled it to increase revenue. The Company is able to bid on larger projects and gives the Company the opportunity to address, among other things, senior petroleum clients' requests for large capacity surveys and the ongoing growth seen in both the domestic and international markets. The Company is finding that its geographic and industry diversity is providing opportunities for growth despite the economic challenges being felt by the resource industries. The recent successes and discoveries enjoyed by a number of our mining clientele are very exciting and it is encouraging to know that we played a part in their successes.

Kinetex's 2009 plans include the acquisition of a minimum of 1,200 sensors which will round out our fourth crew and provide the basis for a fifth data acquisition crew. Each crew is equipped with ION Geophysical Inc.'s cutting edge VectorSeis® digital 3 component ("3C") geophysical instrumentation.

Kinetex's presence in South America, through its subsidiary Kinetex Surcusal Colombia Inc., has provided the Company with a new market and geographical diversification. The Company established a regional office in Bogota, Colombia in late 2008 to identify and seize business opportunities in both Colombia and other parts of South America, and enjoys strong growth with an expanding list of clientele.

Looking forward, the Company sees opportunity for growth at an accelerated rate once overall confidence returns to the world markets. The Company also sees potential opportunities developing in the area of project participation, which has been reinforced by recent successes in this area.

In conclusion, the Company has continued to execute its business plan over the past year and current quarter. While the Company's growth rate has slowed somewhat due to the delay and or postponement of some projects, the Company remains confident that its business strategy remains intact. Management is looking forward to a busy year and is confident that the Company will be able to take advantage of the opportunities available to it.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements. Based on current available information, the Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that those expectations will prove to be correct. The forward-looking statements in this news release are expressly qualified by this statement, and readers are advised not to place undue reliance on the forward-looking statements.

About Kinetex

Kinetex is an oil, gas and mineral exploration services company with offices in Vancouver, BC, Calgary, Alberta and Bogota, Colombia. Through its subsidiaries, Kinetex provides data-rich high resolution subsurface images - essentially a brand-new exploration tool - to the energy, metals and minerals exploration and development industries seeking to go beyond the limitations of traditional data acquisition methods.

The company seeks safe harbour.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Kinetex Resources Corporation
    Gil Schneider
    Chief Executive Officer
    604-484-5761 or Toll Free: 1-888-484-5761
    604-484-5760 (FAX)
    gil@kinetex.ca
    www.kinetex.ca