SOURCE: Grifco International, Inc.

March 03, 2005 14:55 ET

GFCI Operational Update and Earnings Guidance for 2004-2005

HOUSTON, TX -- (MARKET WIRE) -- March 3, 2005 -- Grifco International, Inc. (OTC: GFCI), a provider of oil and gas services equipment to the worldwide oil and gas industry, announces net income of $2.6 million, or approximately $0.13 per share on $7.5 million gross revenue for the six months ending December 31st, 2004.

Grifco International goals for the second half of the year are predicated upon achieving significant growth in revenue and shareholder equity. Based upon Grifco's aggressive acquisition schedule and expanding product line, management believes the third and fourth quarter 2005 will earn an additional $0.23 to $0.25 per share for the fiscal year ending June 30th 2005. The Company's forecast is based on its ongoing projects and acquisitions, including:

GFCI Signs LOI to Acquire Global Oil Tools

Global is equipped with state-of-the-art machinery and produces a complete line of more than 6,000 with over 150 customers. Global has $1.2 million in inventory, $2.2 million in assets, $800,000 works in progress, $400,000 accounts receivable, and should add over $1.2 million in net profit to Grifco in the next 12 months.

GFCI Signs Completion Screen Joint Venture

The Grifco International PMC screen was developed in China under a long-term Strategic Cooperation Relationship with Halliburton and China Petroleum Technology Development Company, having been deployed and tested in all the major oilfields in China. Currently the screen is being supplied to Chinese National Petroleum Corporation, China National Offshore Oil Corporation, SINOPEC, and Halliburton. Management estimates the PMC screen will increase company revenue approximately $2.5 million in the next 12 months.

GFCI Markets SCUDA Tool

The worldwide crisis of potable drinking water suggests an immense market exists for this SCUDA tool. Grifco is expanding into the foreign arena by utilizing sales agents worldwide; presently, Grifco has agents in South America, Singapore, and China. Grifco believes it has the ability to effectively market this tool to domestic and international clients and estimates a potential revenue of $2 million in 2005.

GFCI Acquires KO-VAC Systems

KO-VAC Systems markets a vacuum-based disposal unit with electrical and diesel systems for fluid and/or solid clean up. GFCI anticipates KO-VAC to be worth $2 million per year after twelve months, and generate $4-5 million in the first 2 years.

GFCI Increases Production Output

GFCI's installment of a CNC Turning Center and CNC Mill allow Grifco to be highly competitive with its price quotes and delivery schedule. Grifco International has experienced a 500% production increase with the new machinery.

GFCI Establishes Rental Venture in Mexico

The rental service in Mexico should generate approximately $2.5 to $3 Million in revenue for 2005. Grifco looks forward to the continued expansion of its tool division in Mexico; Grifco de Mexico should contribute $5 to $6 Million in annual revenue.

Grifco Field Tests Corrosion Inhibitor Tool in China

The Corrosion Inhibitor Tool (Silver Hawg) performed for one year in the largest oil field in China. The test gives Grifco's agent in China the opportunity to sell approximately one hundred tools by the close of 2004. Sales in China for 2005 will likely double. The success in China should result in increased revenue (in China) for Grifco International, Inc. of approximately $1.5 million in the first year.

PEMEX Field Tests With Grifco International

PEMEX , the 3rd largest producer of crude oil in the world, recently completed joint testing with Grifco International, Inc. utilizing the "Silver Hawg." PEMEX has issued Grifco International, Inc. an immediate contract for additional wells; pending favorable review, Grifco International will prepare to supply up to 300 wells, while awaiting a third contract installation for the northern district of Mexico. The contracts with PEMEX will generate approximately $2.5 million.

                      Six Months Ended December 31st, 2004:
                       (UNAUDITED, in millions of dollars)
Earnings                              7.5
Net Income                            2.5
Per Share                             .13
"The strong results in the first half were in line with our expectations. If our acquisition schedule progresses as planned, our earnings projection of an additional $0.23 to $0.25 per share is attainable," stated Jim Dial, President and CEO of Grifco International, Inc. "For the first six months of our fiscal year, our profits are running approximately three times higher than the previous six months."

Grifco International, Inc. is a leading provider of oil and gas services equipment, specializing in the conception, architecture, and development of tools for the coil tubing, wire line, and snubbing industry throughout the U.S., China, Mexico and South America. Grifco's patented products are known and used throughout the world. In addition to our patented tools, Grifco designs and manufactures over 350 products for the Oil and Gas industry with a clientele boasting the biggest names in the business, including Halliburton, Exxon, and Schlumberger. Please visit www.grifco.org.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The Company cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those the Company expects include changes in natural gas and oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as our ability to access them, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting our business. More information about the risks and uncertainties relating to the Company's forward-looking statements are found in our SEC filings.

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