EcoMax Energy Services Ltd.

EcoMax Energy Services Ltd.

August 15, 2005 09:15 ET

EcoMax Announces Second Quarter Earnings / Record Sales

CALGARY, ALBERTA--(CCNMatthews - Aug. 15, 2005) - EcoMax Energy Services Ltd. (TSX VENTURE:EES) ("EcoMax") announces its results for the second quarter ended June 30, 2005.

EcoMax reported a profit of $54,000 for the quarter ended June 30, 2005 as compared to a loss of $185,000 for the comparable period of 2004. This is the first time the Company has shown a profit in consecutive quarters and is a profit turnaround of $540,000 compared to the first half of last year. Sales increased 48% to a second quarter record $3,147,000 from sales of $2,121,000 recorded in the quarter ended June 30, 2004 and are up 58% on the first half results This sales increase is primarily as a result of sales of new BOP stacks. Corporate gross margins were successfully maintained at 27%, while SG&A expenses as a percentage of sales fell to 23% in the 2nd quarter of 2005 compared to 33% in the same period of 2004.

President and CEO Wayne Thomson said:

"The Company has continued the improved performance of the previous two quarters. The profitability of the base business has improved dramatically and we continue to believe that we have put all the pieces in place to initiate a breakthrough in the sales of the EcoMax Pump.

Record activity levels in the oil and gas industry give us cause for optimism for maintenance and project work through the end of this year and into 2006. To date, the Company has received commitments for the delivery of an additional $2.7 million in new BOP stacks over the remainder of 2005 and the Company's BOP sales and service operation is continuing its excellent financial performance.

While sales of the EcoMax Pump have to date disappointed, we continue to direct significant resources to marketing this product. We are focusing our sales efforts on a select number of customers where sales potential is greatest. We have also introduced financing options for customers that we expect will allow for quicker generation of sales. We are looking for sales to increase over the remainder of the year from units sold in 2004.

EcoMax's financial position improved significantly in the 2nd quarter. The Company completed an extension of the $172,000 debenture to June 2007. We have also received approval from shareholders and the debenture holders that allow the extension of the $500,000 debenture to February 2008. These measures improved the Company's working capital position by $672,000. Ongoing support from our bank and continued generation of cash from operations will allow us to further improve our financial position and pursue opportunities as they arise."

Summarized financial information for the quarter and six months ended
June 30, 2005 and 2004 are as follows (in thousands of Canadian

Quarter ended June 30 Six months ended June 30
2005 2004 2005 2004
Sales 3,147 2,121 6,396 4,052
Cost of sales 2,295 1,544 4,668 3,062
Gross margin 852 577 1,728 990
Selling, general
& admin 707 690 1,419 1,260
145 (113) 309 (270)
Interest 43 31 80 61
Amortization 48 41 101 81
Net income (loss 54 (185) 128 (412)

To review the complete financials, please go to SEDAR's web-site at

EcoMax Energy Services Ltd. is an emerging oilfield services company whose product offering includes BOP and valve sales and service solutions to the oil and gas and other industries in Western Canada and the patented EcoMax Chemical Pump. The EcoMax Pump reduces operating costs and greenhouse gas emissions at natural gas installations by utilizing a small pressure differential from the wellhead to the flow line to power a methanol chemical injection pump, which prevent hydrates from forming at the wellhead. The pump returns the exhaust gas to the sales line increasing natural gas sales and eliminating wellhead atmospheric emissions. The EcoMax Pump offers significant economic benefits to customers while enhancing safety and landowner relations. Operators can sell gas now being emitted to the atmosphere from sweet gas facilities, eliminate the need for propane at sour gas facilities and may accumulate carbon credits for greenhouse gas reductions. The EcoMax Pump addresses issues in the recently ratified Kyoto agreement and the updated Alberta Energy and Utilities Board Guide 60 on the emission of fugitive gases from well sites.

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

Contact Information