VGS Seismic Canada Inc.

VGS Seismic Canada Inc.

January 25, 2007 13:00 ET

VGS Seismic Canada Inc.: Corporate Presentation -Further Information


Further to VGS Seismic Canada Inc.'s ("Company") news release of January 24, 2007 regarding its corporate presentation, the Company advises that the corporate presentation contains the following pertinent information:

Estimated Unaudited Key Finance Milestones - Sources of funds to date

Total equity raised $24.4MM
Convertible debt $10.0MM
Client portion of data creation $21.1MM
Resale revenue $ 3.5MM

Data Ownership
Uses of funds to December 31, 2006

85% of capital used for seismic data ownership
No partners or revenue share on VGS data creation contracts
Pure ownership play, keeping overhead low

Estimated Unaudited Capital Deployment to date - Library growth

Total cap-ex for data creation $33.0MM (67%)
Total cap-ex for data purchase $11.1MM (22%)
Total cap-ex for data exchange $ 5.4MM( 11%)

Key Operational Milestones

3,000 square kilometers of 3D data ownership
Reverse Take Over of a publicly traded company on the TSX Venture exchange
Company has over $40MM in tax losses & credits
Cash re-licensing sales on target at $3.5MM

Data Ownership - The Plan

Organic Database Growth:

ACHIEVED - 2989 square kilometers as of December 2006 - 161% of initial
Forecast 4,800 square kilometers by fiscal year end 2007
Forecast 6,500 square kilometers by fiscal year end 2008

Estimated Unaudited Annualized Capital Requirements

Creation Purchase Total
2006 $33MM $17MM $50MM
2007(target) $32MM $15MM $47MM
2008(target) $36MM $17MM $54MM

Data Ownership - Sources and Uses

VGS Funds required

New data creation $0 - 25MM
Data Purchase (up to) $0 - 15MM
Identified cash requirement $0 - 40MM

Estimated unaudited sources of funds

Current working capital $1MM
Available debenture $10MM
9.5% interest
Convertible @ $1.50/share

Financing strategy (debt vs. equity), will depend on market conditions
Year end estimated unaudited debt to equity ratio is less than 1.0:2.5

Data Ownership - Measured Unaudited Results
For the 6 months ended December 31, 2006

Free cash flow is approximately $1.6MM
Free cash flow = EBITDA - Acquisition revenue
EBITDA (earnings before interest, taxes, depreciation and
Acquisition revenue (is the client paid portion of a data creation

Total cash re-licensing revenue for the period of approximately $2.8MM

Interest Coverage for the period is approximately 3x interest coverage
= free cash flow / interest expense

The Company models revenue for data to return its cost within 36 months of
completion of purchase

Cash license re-sales for 2006 were over 36% of cost on an annualized basis

Executive Management Team

Steven R Vasey, President & Chief Executive Officer
Scott Milroy, Chief Financial Officer
Robert Dale Harger, Chief Operating Officer
Lisa Maric, V.P. Marketing

For further information, see the Company's corporate presentation available at and at

About the Company

The Company carries on the business of pursuing opportunities in the creation, acquisition and marketing of seismic data for use in the oil and natural gas industry and trades on the TSX Venture Exchange ( under the symbol VGS.

Forward Looking Information

Certain information contained in this press release, including information and statements which may contain words such as "could", "plans", "should", "anticipates"," expect", "believe", "will", and similar expressions and statements relating to matters that are not historical facts are forward-looking information including, but not limited to, information as to: future expenditures, drilling activity levels, oil and gas prices and demand, expansion and other development trends of the oil and gas industry; business strategy, expansion and growth of VGS Seismic Canada Inc.'s ("VGS") business and operations, including VGS's market share and other such matters. This forward looking information is based on certain assumptions and analyses made by VGS in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances.

However, whether actual results, performance or achievements will conform with VGS's expectations and predictions expressed or implied by the forward looking information is subject to known and unknown risks and uncertainties which could cause actual results to differ materially from VGS's expectations and predictions expressed or implied by the forward looking information, including: fluctuations in the price and demand of oil and gas; fluctuations in the level of oil and gas exploration and development activities; fluctuations in the demand for VGS's services; the ability of VGS to raise capital and to meet its debt service requirements; the ability of VGS's customers to raise capital for seismic data and surveys; the existence of competitors; technological changes and developments in the oil and gas industry; the effects of weather conditions on operations and facilities; the seasonality impact on conducting seismic surveys; the ability of VGS to financially participate in large seismic surveys on account of increases in costs of conducting such seismic surveys; the ability of VGS to protect its proprietary rights to the seismic data; the existence of operating risks inherent in VGS's services; the lack of availability of qualified personnel or management; VGS's dependence on qualified seismic acquisition contractors to conduct seismic surveys; general economic, market or business conditions, including stock market volatility; changes in laws or regulations, including taxation and environmental regulations; other unforeseen conditions which could impact on the use of services supplied by VGS and those risks and uncertainties described in the Joint Information Circular and Proxy Statement of VGS Database International Inc. and VGS Capital Ltd. dated November 23, 2006 (in particular Appendix B) which was filed as a Filing Statement of VGS on SEDAR at

Consequently, all of the forward-looking information contained in this press release is qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by VGS, as expressed or implied by the forward looking information, will be realized or, even if substantially realized, that they will have the expected consequences to or effects on VGS or its business operations. VGS assumes no obligation to update publicly any such forward-looking information, whether as a result of new information, future events or otherwise. Readers should not place undue reliance on forward-looking information.

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

Contact Information