Phoenix Oilfield Hauling Inc.
TSX VENTURE : PHN

Phoenix Oilfield Hauling Inc.

June 12, 2006 16:33 ET

Phoenix Oilfield Hauling Inc. Acquires Robin's Oilfield Hauling

NISKU, ALBERTA--(CCNMatthews - June 12, 2006) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES.

Phoenix Oilfield Hauling Inc. ("Phoenix" or the "Company") (TSX VENTURE:PHN) is pleased to announce that it has, pursuant to a purchase and sale agreement dated June 12, 2006, acquired all of the outstanding shares of Robin's Oilfield Hauling and Hot Shot Service Ltd. ("Robin's"). Robin's is a privately owned company based in Devon, Alberta that specializes in the transportation of products, materials, supplies, and equipment required for the exploration, development and production of petroleum resources. Robin's was incorporated April 20, 1988 in the Province of Alberta. The acquisition is an arms-length transaction.

The purchase price of the acquisition is approximately $21.8 million and was paid by way of approximately $10.5 million in cash and the issuance of approximately 9.5 million common shares of Phoenix as well as the assumption of debt. The shares issued in connection with the acquisitions were issued at a deemed value of $1.00 per common share. This price was based on the issue price for Phoenix's $25 million financing which closed on May 5, 2006. No finder's fee was paid in connection with the acquisition.

The acquisition of Robin's significantly increases Phoenix's fleet and further expands the Company's operating presence in its core central Alberta focus area. Phoenix and Robin's have worked closely in the past and have highly complimentary assets and operations. In connection with the acquisition, Robin Peterson, the founder and majority owner of Robin's, will remain with the company focusing principally on its field operations and ensuring a seamless integration. Darwin Hartley, a minority owner and General Manager of Robin's, will remain in his current role. Both Robin and Darwin bring valuable long term relationships and a wealth of industry experience which will create new opportunities for the company.

According to Leo Provencher, President of Phoenix, "Robin and Darwin have built a first class operation which has tremendous synergies with Phoenix. Adjusted for non-recurring management bonuses their business generated approximately $5 million in EBITDA(1) (earnings before interest, taxes, depreciation and amortization) for the twelve month's ended March 31, 2006 and we anticipate further growth through the commitment to approximately $2.6 million in new capital assets to be received over the next 2 months."

The operations of Phoenix and Robin's will result in the combined business operating a fleet of approximately 60 trucks and 80 trailers by mid summer 2006 working out of field locations in Devon, Nisku and Grande Prairie. Based on Robin's historical financial performance, the acquisition will be immediately accretive to Phoenix's cash flow and earnings per share.

For the twelve months ended March 31, 2006 Robin's earned revenue of $10.5 million (2005: $6.5 million) and net income of $730 thousand (2005: $147 thousand). Management bonuses declared in 2006 were $4.1 million (2005: $1.9 million). As at March 31, 2006 total assets were $6.8 million (2005: $4.0 million), working capital was a deficit of less than $2.6 million greater than (2005: less than $1.4 million greater than ), including callable debt, due on demand of $1.6 million (2005: $1.4 million). Long term debt was nil as at March 31, 2006 and March 31, 2005 and shareholder's equity was $349 thousand (2005: $18 thousand).

Certain information set forth in this press release contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company's control, including the impact of general economic conditions, industry conditions, volatility of oil and gas prices, currency fluctuation, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Actual results, performance or achievement could differ from those expressed in, or implied by, these forward-looking statements, and accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits will be derived there from. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

(1) EBITDA is not a recognized measure under GAAP and consequently does not have a standard prescribed meaning. EBITDA is equal to Net Income adjusted to exclude amortization expense, depreciation expense, gains on asset sales, interest expense, and income taxes. EBITDA is commonly used by investors and financial analysts in the oilfield services industry as a supplementary non-GAAP financial measure in order to evaluate a company's operating performance. Phoenix's method of calculating EBITDA may differ from other companies, and accordingly, it may not be comparable to a similarly described measure used by another company.

Neither the TSX Venture Exchange (the "Exchange") nor any securities regulatory authority has in any way passed upon the merits of the transaction described in this press release and any representation to the contrary is an offence.

The common shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or an exemption from such registration is available.

Contact Information

  • Phoenix Oilfield Hauling Inc.
    Doug Eger
    Vice-President of Finance and CFO
    (780) 955-8840