Phoenix Oilfield Hauling Inc.
TSX VENTURE : PHN

Phoenix Oilfield Hauling Inc.

October 30, 2006 08:30 ET

Phoenix Oilfield Hauling Inc. Announces Acquisition of the Operating Assets of Ability Hauling Ltd.

NISKU, ALBERTA--(CCNMatthews - Oct. 30, 2006) -

This press release is not to be distributed to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities law.

Phoenix Oilfield Hauling Inc. (TSX VENTURE:PHN) is pleased to announce that it has, pursuant to a transaction agreement dated October 27, 2006, acquired all of the operating assets of Ability Hauling Ltd. ("Ability"). Ability is a privately owned company based in Calgary, Alberta that specializes in the transportation of products, materials, supplies, and equipment required for the exploration, development and production of petroleum resources. The acquisition is an arms-length transaction.

The purchase price, based on the closing price of the Company's common shares on October 27, 2006 of $0.96 is approximately $10.98 million and was paid by way of approximately $6.2 million in cash and the issuance of 5.0 million common shares of Phoenix, subject to closing adjustments, including adjustments for working capital. The purchase price, and cash portion, includes the acquisition of an estimated $400,000 in working capital to be paid by Phoenix to Ability 30 days after the Closing. No finder's fee was paid in connection with the acquisition.

The acquisition of Ability further increases Phoenix's fleet and expands the Company's operating footprint. In connection with the acquisition, Courtney Gillis, the founder of Ability, will remain with the company focusing principally on developing the Company's business from its new base of operations in Calgary.

According to Leo Provencher, President of Phoenix, "Ability is a first class operation, well regarded by its customers, and represents an attractive point to expand our heavy-haul capabilities". Adjusted for non-recurring management bonuses Ability generated approximately $2.7 million in EBITDA(1) (earnings before interest, taxes, depreciation and amortization) for the twelve month's ended August 31, 2006 and Mr. Provencher says "Phoenix anticipates further growth through the delivery of two new trucks that were added to the fleet near the August 31 year-end".

The operations of Phoenix and Ability will result in the combined business operating a fleet of approximately 65 trucks working out of field locations in Devon, Nisku, Calgary and Grande Prairie.

(1) EBITDA is not a recognized measure under GAAP and consequently does not have a standard prescribed meaning. EBITDA has been calculated as Net Income adjusted to exclude amortization and 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.

This press release contains forward-looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances or achievements of Phoenix to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, fluctuations in the market for oil and gas and related products and services, political and economic conditions, the demand for services provided by Phoenix, industry competition and Phoenix's ability to attract and retain both customers and key personnel.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.


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