Aveda Transportation and Energy Services Announces Record Revenue for the Second Quarter of 2012

CALGARY, ALBERTA--(Marketwire - Aug. 16, 2012) - Aveda Transportation and Energy Services ("Aveda" or the "Company") (TSX VENTURE:AVE), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced record revenue for the three and six months ended June 30, 2012.

2012 BUSINESS HIGHLIGHTS

• Revenue for the six months ended June 30, 2012 grew by $5.9 million to $40.4 million compared with revenue of $34.5 million for the same period in 2011;
• Generated net loss for the six months ended June 30, 2012 of ($0.3) million, as compared to net income of $0.6 million for the same period in 2011;
• Generated Adjusted EBITDA(1) for the six months ended June 30, 2012 of $4.3 million, a decrease of $1.5 million compared with Adjusted EBITDA(1) of $5.8 million for the same period in 2011;
• Expanded equipment base by acquiring $10.5 million (net of dispositions) of additional equipment during the first half of 2012;
• Commenced operations in a new branch in Pleasanton, TX; and
• Raised $8.0 million ($7.2 million net of financing costs) in new equity financing.

"We have demonstrated our capabilities with strong revenue growth across our North American operations" said David Werklund, Interim President and CEO of Aveda "We continue to move forward with our strategy of building a highly profitable specialty transportation and rentals company to serve the energy industry."

The Company's audited consolidated financial statements and Management's Discussion and Analysis are available on the Company's website at www.avedaenergy.com or the SEDAR website at www.sedar.com.

Financial Overview

(in thousands, except ratios and per share amounts)
	Six Months Ended June 30, 2012		Six Months Ended June 30, 2011		% Change 2010 - 2011		Three Months Ended June 30, 2012		Three Months Ended June 30, 2011		% Change 2010 - 2011
Revenue	40,380		34,501		17.0	%	17,780		14,058		26.5	%
Gross profit	7,104		8,309		-14.5	%	2,815		2,964		-5.0	%
Gross margin	17.6	%	24.1	%	-27.0	%	15.8	%	21.1	%	-24.9	%
Adjusted EBITDA(1)	4,345		5,787		-24.9	%	1,421		1,546		-8.1	%
Adjusted EBITDA(1) as a percentage of revenue	10.8	%	16.8	%	-35.8	%	8.0	%	11.0	%	-27.3	%
Net income (loss)	(330	)	587		-156.2	%	(770	)	(1,088	)	-29.2	%
Net income (loss) as a percentage of revenue	-0.8	%	1.7	%	-148.0	%	-4.3	%	-7.7	%	-44.0	%
Adjusted EBITDA per share(1),(2)	0.58		1.01		-42.6	%	0.18		0.27		-33.3	%
Net earnings per share(2)	(0.04	)	0.10		-140.0	%	(0.10	)	(0.19	)	-47.4	%
Current ratio	2.10		0.53		296.2	%	2.10		0.53		296.2	%
Debt to equity ratio(3)	0.89		1.74		-48.9	%	0.89		1.74		-48.9	%
Debt to EBITDA ratio(3),(4)	2.24		2.14		4.7	%	2.24		2.14		4.7	%
Net capital assets additions	10,540		13		80976.9	%	6,008		13		46115.4	%

Notes:

(1) This News Release contains the term Adjusted EBITDA. Adjusted EBITDA as presented does not have any standardized meaning prescribed by international financial reporting standards (IFRS) and therefore it may not be comparable with the calculation of similar measures for other entities. Management uses Adjusted EBITDA to analyze the operating performance of the business. Adjusted EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. It is defined as earnings before interest, taxes, depreciation and amortization excluding foreign exchange gains or losses which are primarily related to the US dollar activities of the Company and can vary significantly depending on exchange rate fluctuations, which are beyond the control of the Company, and write downs of intangible assets, goodwill impairment, financing costs, gains or losses on disposal of assets, stock based compensation, fees and expenses on settlement of debt and losses on extinguishment of debt.

(2) 2011 Per share amounts calculated to take into consideration the Company's 30:1 share consolidation with took place on November 28, 2011 as if the share consolidation had been in effect throughout 2011.

(3) Debt includes, revolving credit facility, loans and borrowings, obligations under finance lease and convertible debenture as per their carrying amounts on the balance sheet.

(4) Six and three months ended June 30 debt to EBITDA ratio calculated using Adjusted EBITDA for the trailing 12 months.

Outlook

The Company earns revenue primarily by providing specialized transportation services required for the drilling exploration, development and production of petroleum resources. Demand for the Company's transportation services is therefore linked to the economic conditions of the energy industry and the general level of exploration, development and production of petroleum resources in Western Canada and in the United States. Drilling and exploration activity in the WCSB and in the United States has in recent history been affected by amongst other things, low natural gas prices and higher than normal natural gas inventories in storage caused by many factors including reduced demand for commodities as a consequence of a global recession and the temporary oversupply of natural gas caused by the fast development of shale gas resources in the United States. Countering these factors is strong pricing for oil. Up to July, rig utilization in 2012 has been higher than 2011(1). The overall performance of the oil industry continues strong despite instabilities in global markets throughout the first two quarters of the year, due mostly due the European credit crisis and the Arab uprisings. These volatilities may reduce drilling activity in the short term due to negative impacts on prices, but in the long term can potentially contribute to the strengthening of activity levels in the North American E&P sector, as the United States continues to pursue their goal of reduced dependence on foreign energy resources.

In Canada the Company has enjoyed stable activity levels of 2012 compared to 2011 in the markets in which it operates. Drilling rig utilization in the Western Canada Sedimentary Basin ("WCSB") has maintained similar levels to 2011, and is expected to maintain the trend till year end(2). If this trend is maintained, the Company expects stable utilization of its equipment compared to 2011.

Opportunities for expansion and growth appear strongest for the Company in the United States. According to the Baker Hughes Rig Count(2), average drilling activity in Texas has grown 19.5% year over year. This has allowed Aveda to grow significantly in the area, including the recent opening of two new branches (Pleasanton and Odessa). Pennsylvania has experienced a decline of 30% in active rigs due to low gas prices and the predominance of gas plays in the region. However, Aveda has been able to maintain equipment utilization due to excellent customer relationships and recognized superior operational efficiencies compared to competitors. It is expected that rig counts will continue the downward trend in Pennsylvania gas plays, but the decline will be partially offset by the relocation of rigs to oil plays further west in the state.

The recent financings closed in December 2011 and June 2012 have significantly strengthened the Company's balance sheet. The Company expects to grow its equipment fleet by approximately an additional $7.0 million in the remainder of 2012. Included in this amount is $1.8 million which the Company expended during July 2012 which retired almost all of the Company's obligations on its operating leases related to its fleet. This expenditure is anticipated to have a $2.0 million positive impact on EBITDA over the next 12 months. The balance of the equipment investments will be used for the recently announced expansion into Odessa and to augment the equipment fleet throughout the rest of the Company. For the remainder of 2012, the Company has also committed approximately $0.5 million to improved technology in the form of satellite GPS tracking systems and a new ERP system. These technology investments are expected to create opportunities for cost saving synergies. The Company anticipates reaping the financial benefits of these synergies in 2013 and beyond.

(1),(2) Baker Hughes Rig Count, accessed on August 2 2012, at http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

(2) CAODC press release, accessed on August 2, 2012, at http://www.caodc.ca/mediaroom/Archive-Press_Presentations-pdf/CAODC_forecast_May12.pdf

The Company also recently announced an acquisition of certain rental assets (see Section 18: Subsequent Events) for $7.5 million. The Company anticipates these rental assets will deliver approximately $3.1 million in EBITDA in 2013. In addition, following a market analysis and consecutive periods of relatively poor financial performance, the Company is electing to close its Melita branch and will allocate its fleet assets between the newly opened Odessa branch and its operations in Nisku. With the redistribution of assets, the Nisku branch will have a greater focus on rig moving activities in the future. The Company expects transaction costs along with costs of closing the Melita branch, starting up the Odessa branch and reallocating assets and personnel to be in the range of approximately $1.2 million and $2.0 million. Most of these costs will be incurred in the third quarter of 2012.

About Aveda Transportation and Energy Services

Aveda provides specialized transportation of products, materials, supplies and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States of America principally in and around the states of Texas and Pennsylvania. Transportation services include both the equipment necessary to move the load as well as a trained, professional driver capable of securing, moving and manipulating the load at its origin and destination. Aveda's rental operations include the rental of tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.

Aveda was incorporated in 1994 as a private company to serve the oil and gas industry. In the spring of 2006 the Company went public on the TSX Venture Exchange. Aveda has major operations in Calgary, AB, Slave Lake, AB, Nisku, AB, Mineral Wells, TX, Pleasanton, TX, Odessa, TX and New Columbia, PA. Aveda is publicly traded on the TSX Venture Exchange under the symbol AVE. For more information on Aveda please visit www.avedaenergy.com.

This News Release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes. In particular, this News Release contains forward-looking statements relating to: projected capital expenditures and commitments and the financing thereof; projected transaction costs; projected costs of opening the branch in Odessa, TX; increases in revenue; equipment delivery and deployment dates; geographic allocation of equipment; expectations regarding the Company's ability to raise capital and to increase its equipment fleet; benefits associated with financial results; activity levels; business strategy; successful integration of structural changes; restructuring plans acquisitions. Aveda believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this News Release in connection with the forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:

• the performance of Aveda's businesses, including current business and economic trends;
• oil and natural gas commodity prices and production levels;
• the effect of the rebranding on Aveda's businesses;
• capital expenditure programs and other expenditures by Aveda and its customers:
• the ability of Aveda to retain and hire qualified personnel;
• the ability of Aveda to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities;
• the ability of Aveda to maintain good working relationships with key suppliers;
• the ability of Aveda to market its services successfully to existing and new customers;
• the ability of Aveda to obtain timely financing on acceptable terms;
• currency exchange and interest rates;
• risks associated with foreign operations;
• changes under governmental regulatory regimes and tax, environmental and other laws in Canada and the United States; and
• a stable competitive environment.

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in Aveda's annual information form and management discussion and analysis for the year ended December 31, 2011 (the "MD&A"). Any forward-looking statements are made as of the date hereof and, except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

This News Release contains the terms EBITDA and Adjusted EBITDA which are defined in the MD&A. EBITDA and Adjusted EBITDA as presented do not have any standardized meaning prescribed by international financial reporting standards (IFRS) and therefore may not be comparable with the calculation of similar measures for other entities. Management uses Adjusted EBITDA to analyze the operating performance of the business. Adjusted EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS.