Phoenix Announces Record Revenue for the First Quarter of 2012

CALGARY, ALBERTA--(Marketwire - May 24, 2012) - Phoenix Oilfield Hauling Inc. ("Phoenix" or the "Company") (TSX VENTURE:PHN), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced record revenue for the quarter ended March 31, 2012.

2012 BUSINESS HIGHLIGHTS

• Revenue for the quarter ended March 31, 2012 grew by $2.2 million to $22.6 million, compared with revenue of $20.4 million for the same period in 2011;
• Generated net income for the quarter ended March 31, 2012 of $0.4 million, a decrease of $1.3 million compared to $1.7 million for the same period in 2011;
• Generated Adjusted EBITDA⁽¹⁾ for the quarter ended March 31, 2012 of $2.9 million, a decrease of $1.3 million compared with Adjusted EBITDA⁽¹⁾ of $4.2 million for the same period in 2011;
• Expanded equipment base by acquiring $4.5 million of additional equipment during the quarter ended March 31, 2012; and
• Completed branch location in Pleasanton, TX to commence operations in the second quarter of 2012.

"We are pleased to report $22.6 million of revenue in the quarter. While our Adjusted EBITDA and net income are below 2011 levels predominantly due to the restructuring and refurbishment of our Manitoba operations," said David Werklund, Interim President and CEO of Phoenix, "we expect our results to strengthen in the last half of the year as we continue to focus on growth and cost management. The implementation of our new management reporting system will play an important part in our cost management strategy as we expand our operations."

Financial Overview

(in thousands, except per share and ratio amounts)
	2012		2011		$ Change 2011 - 2012		% Change 2011 - 2012
Revenue	22,600		20,443		2,157		10.6	%
Gross profit	4,289		5,345		(1,056	)	-19.8	%
Gross margin	19.0	%	26.1	%	N/A		N/A
Adjusted EBITDA(1)	2,924		4,241		(1,317	)	-31.1	%
Adjusted EBITDA(1) as a percentage of revenue	12.9	%	20.7	%	N/A		N/A
Net income	440		1,675		(1,235	)	-73.7	%
Net income as a percentage of revenue	1.9	%	8.2	%	N/A		N/A
Adjusted EBITDA per share(3)	0.41		0.75		(0.34	)	-45.3	%
Earnings per share - basic and diluted(3)	0.06		0.29		(0.23	)	-79.3	%
Current ratio(2)	2.41		0.59		1.82		308.1	%
Debt to equity ratio(4)	1.50		1.60		(0.10	)	-6.4	%
Debt to EBITDA ratio(4),(5)	2.74		2.81		(0.07	)	-2.6	%

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)	Current ratio calculated as current assets divided by current liabilities.
(3)	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 affect in prior to November 28, 2011.
(4)	Debt includes, revolving credit facility, loans and borrowings, obligations under finance lease and convertible debenture as per their carrying amounts on the balance sheet.
(5)	Debt to EBITDA ratio calculated using Adjusted EBITDA for the last 12 months.

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

The Company's investor presentation can be found on the Company's website at www.phoenixhauling.com.

Phoenix is also pleased to announce that, at its recently held Annual and Special Meeting, the following individuals have been appointed to the Company's Board of Directors: David Werklund, Martin Cheyne, Douglas McCartney and Paul Shelley. Mr. Gerald Gilewicz and Mr. Ronald Foreman did not stand for re-election and the Company would like to thank both Mr. Gilewicz and Mr. Foreman for their past service and wish them well with their future endeavors.

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. The outlook for the demand for oil, suggest improving levels of rig utilization in 2012 over 2011. However, global markets continue to show volatility due to European economic challenges and political instabilities in Africa and the Middle East. These volatilities may reduce drilling activity in the short term, but in the long term can potentially contribute to the strengthening of the level of activity 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. In April 2012 the Petroleum Services Alliance of Canada ("PSAC", information available at www.psac.ca) updated their forecast of wells drilled in Canada in 2012, projecting a 2% increase in 2012 compared to 2011. If this forecast proves to be true, 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 Baker Hughes (see www.bakerhughes.com), the United States active land rig count on May 4, 2012 showed an increase of 6% over 2011. The current active land based rig count is about 1,900. Much of that activity continues to be in key shale and tight oil and gas plays, but an increasing number of rigs are also being directed to areas previously in decline that are now facing new growth due to advancements in Enhanced Oil Recovery ("EOR") technologies. The Company is currently active in three of those plays through its branches in Texas and Pennsylvania and expects that levels of industry exploration activity, as measured by the active rig count, will remain at least consistent with current levels over the next few quarters.

The recent financings closed in December 2011 have significantly strengthened the Company's balance sheet. The Company expects to grow its equipment fleet by approximately an additional $8.0 million in the remainder of 2012. Including equipment acquired by March 31, 2012, approximately $7.0 million of the equipment fleet investment expected to be completed by the end of the second quarter will be deployed at the recently announced expansion in Pleasanton, TX. The balance of equipment investments will be used to augment the equipment fleet throughout the rest of the Company and also to retire some equipment that is currently used by the Company through various operating leases. Further, the Company has committed approximately $1.0 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 the latter half of 2012 and beyond. The company also completed the purchase of certain land and building in Texas in the second quarter of 2012 of $0.7 million and will also be spending approximately $0.5 million on leasehold improvements and other non-revenue generating fixed assets during 2012.

The Company currently operates under several brand names. The Company has made a decision to rebrand itself under one unified name. It is anticipated that the cost of rebranding will have a negative impact of between $0.4 million and $0.5 million on earnings in the second quarter of 2012. Ultimately, management is of the strong opinion that a unified brand will create synergies throughout the Company which will deliver shareholder value.

The Company made a decision to restructure and refurbish its operations and equipment in Manitoba in the first quarter of 2012. This restructuring and refurbishment is anticipated to have a negative impact on Adjusted EBITDA and earnings in the second quarter of 2012 of approximately $0.25 million as compared to the same period of 2011. Despite the impact of the items mentioned above, the Company anticipates posting strong financial results for 2012 as a direct result from the recently announced expansion into Pleasanton, TX, increased revenue from its operations that will benefit from the capital expenditure program outlined above and the generation of cost saving synergies from the deployment of new technologies as outlined above.

About Phoenix Oilfield Hauling Inc.

Phoenix provides specialized transportation services required for the drilling, 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. Phoenix's rental operations include the rental of tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.

Phoenix 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. Phoenix has major operations in Calgary, AB, Slave Lake, AB, Nisku, AB, Grand Prairie, AB, Melita, MB, Mineral Wells, TX, Pleasanton, TX and New Columbia, PA. Phoenix is publicly traded on the TSX Venture Exchange under the symbol PHN. For more information on Phoenix please visit www.phoenixhauling.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; expansion; increases in revenue; equipment delivery and deployment dates; rebranding costs; effect of rebranding; geographic allocation of equipment; customer commitments; ability to establish a working relationship with third party suppliers; expectations regarding the Corporation'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 and availability of insurance coverage. Phoenix 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 Phoenix, 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 Phoenix's businesses, including current business and economic trends;
• oil and natural gas commodity prices and production levels;
• the effect of the rebranding on Phoenix's businesses;
• capital expenditure programs and other expenditures by Phoenix and its customers:
• the ability of Phoenix to retain and hire qualified personnel;
• the ability of Phoenix to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities;
• the ability of Phoenix to maintain good working relationships with key suppliers;
• the ability of Phoenix to market its services successfully to existing and new customers;
• the ability of Phoenix 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 Phoenix'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 by Phoenix's annual information form and management discussion and analysis for the year ended December 31, 2011 (the "MD&A") and contained therein under the heading "Risk Factors". Any forward-looking statements are made as of the date hereof and, except as required by law, Phoenix assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.