Phoenix Oilfield Hauling Inc.
TSX VENTURE : PHN

Phoenix Oilfield Hauling Inc.

October 03, 2007 09:30 ET

Phoenix Oilfield Hauling Inc. Announces Acquisition of the Operating Assets of Marcels Truck Service Ltd.

NISKU, ALBERTA--(Marketwire - Oct. 3, 2007) -

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Phoenix Oilfield Hauling Inc. (TSX VENTURE:PHN) is pleased to announce that it has, pursuant to a transaction agreement dated October 2, 2007, acquired all of the operating assets of Marcels Truck Service Ltd. ("Marcels"). Marcels is a privately owned company based in Slave Lake, Alberta that specializes in the transportation of products, materials, supplies, and equipment required for the exploration, development and production of petroleum resources using specialized trucks and trailers designed for oilfield service. The acquisition is an arms-length transaction.

The purchase price of the operating assets, based on the closing price of the Company's common shares on October 2, 2007 of $0.34 is approximately $7.0 million and was paid by way of approximately $6.9 million in cash and the issuance of 200,000 common shares of Phoenix, subject to post closing adjustment for working capital. The purchase price includes the acquisition of an estimated $800,000 in working capital and equipment with a fair market value of approximately $5.6 million. The Company also acquired Marcels real estate assets including a 15.57 acre yard and 16,060 square foot shop and office building for its fair market value of $2.7 million by way of a cash payment of $300,000 and a mortgage of $2.4 million back to the Vendor. No finder's fee was paid in connection with the acquisition. The Company acquired the operating assets of Marcels in part directly and in part indirectly through the purchase of 100% of the common shares of a company incorporated for the purpose of the transaction. The common shares of Phoenix were issued at a deemed price of $0.60.

The acquisition of Marcels increases Phoenix's fleet by 18 trucks to approximately 77 trucks and further expands the Company's operating footprint. In connection with the acquisition, Marcel Fournier, the founder of Marcels, will remain with the company focusing principally on developing the Company's business from its new base of operations in Slave Lake.

According to Leo Provencher, President of Phoenix, "Marcels is a first class operation, well regarded by its customers, and represents an attractive point to expand our rig moving capabilities. This is a business with over 36 years of successful operating history which both complements and expands our operating footprint".

The operations of Phoenix and Marcels will result in the combined business operating a fleet of approximately 77 trucks working out of field locations in Devon, Nisku, Calgary, Grande Prairie and Slave Lake.

"Reader Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) future operations; (ii) future economic conditions; (iii) future capital expenditures; and (iv) cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, loss of markets, volatility of commodity prices, currency fluctuations, environmental risks, competition from other companies, ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Corporation will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws."

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

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