BlueGrouse reports 2006 year end results



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

    TSX.V : BGH

    CALGARY, March 15 /CNW/ - BlueGrouse Seismic Solutions Ltd.
("BlueGrouse") reports the financial and operating results of BlueGrouse for
the year ended December 31, 2006.
    Total revenue increased by 107% to $48.3 million in 2006 from
$23.3 million in 2005. Net earnings for the year ended December 31, 2006 were
$7.1 million ($0.59 per share basic), a 97% increase compared to $3.6 million
($0.54 per share basic) for 2005. Funds from operations (see note (1) below)
for 2006 was $27.7 million ($2.30 per share basic), a 465% increase over the
$4.9 million ($0.81 per share basic) generated in 2005. The weighted average
basic shares outstanding as at December 31, 2006 were 12,046,888 and as at
December 31, 2005 were 6,032,039.

    
    Financial Highlights
    (millions except per share data)
    -------------------------------------------------------------------------
                             3 Months Ended                Year Ended
                               December 31                 December 31
                               -----------                 -----------
                           2006          2005          2006          2005
                           ----          ----          ----          ----
    -------------------------------------------------------------------------
    Revenue           $       12.2  $        7.4  $       48.3  $       23.3
    -------------------------------------------------------------------------
    Amortization of
     data libraries   $        4.6  $        0.4  $       15.2  $        0.9
    -------------------------------------------------------------------------
    Net Earnings      $        2.5  $        1.5  $        7.1  $        3.3
    -------------------------------------------------------------------------
    Net Earnings
     per share;
      Basic                   0.21          0.14          0.59          0.54
    -------------------------------------------------------------------------
      Diluted                 0.17          0.10          0.51          0.46
    -------------------------------------------------------------------------
    Funds from
     operations(1)    $        9.2  $        2.5  $       27.7  $        4.9
    -------------------------------------------------------------------------
    Funds from
     operations per
     share;
      Basic                   0.76          0.24          2.30          0.81
    -------------------------------------------------------------------------
      Diluted                 0.64          0.18          1.86          0.70
    -------------------------------------------------------------------------
    Working capital
     deficiency       $        4.4  $        2.2  $        4.4  $        2.2
    -------------------------------------------------------------------------
    Total Assets              49.3          38.2          49.3          38.2
    -------------------------------------------------------------------------
    Seismic Library
     additions                10.4          16.1          32.0          19.8
    -------------------------------------------------------------------------
    Long-term debt            12.5          10.7          12.5          10.7
    -------------------------------------------------------------------------
    Current portion of
     long-term debt            1.4           2.5           1.4           2.5
    -------------------------------------------------------------------------
    Shareholders equity       19.5           8.9          19.5           8.9
    -------------------------------------------------------------------------
    Weighted average
     shares outstanding
      Basic             12,046,888    10,961,003    12,046,888     6,032,039
    -------------------------------------------------------------------------
      Diluted           15,120,404    14,934,791    15,120,404     6,974,264
    -------------------------------------------------------------------------
    Shares outstanding
     at period end      14,546,209    11,366,087    14,546,209    11,366,087
    -------------------------------------------------------------------------
    (1) These non-GAAP Financial measures are defined as cash flow from
        operating activities minus changes in non-cash working capital items.
        See "Non-GAAP Financial Measures" below.

    OPERATIONAL HIGHLIGHTS

    -   Experienced continued growth in data library sales, increasing from
        $8.7 million for the year ended December 31, 2005 to $13.9 million
        for the year ended December 31, 2006.

    -   BlueGrouse's multi-client sales reached $22.4 million in 2006 as a
        result of 7 surveys conducted in 2006.

    -   In 2006 BlueGrouse's multi-client business segment recorded a record
        969 km(2) of 3D data in total, a 37% increase to our 3D data library
        to a total of 3,608 km(2) of 3D.

    -   During the fourth quarter of 2006, BlueGrouse completed Snake Creek
        multi-client 3D in Southern Alberta, consisting of 412 km(2) of 3D.

    -   During the fourth quarter BlueGrouse acquired the remaining 36%
        interest in SilverTip Surveys Ltd., which it did not previously own,
        resulting in 100% ownership. SilverTip generates revenue from the
        participation in and sale of 2D and 3D multi-client seismic surveys.

    -   By December 31, 2006 BlueGrouse had built a data library of over
        28,347 km of 2D Seismic and 3,273 km(2) of 3D Seismic.
    

    FINANCIAL REVIEW

    Total revenue for the year ended December 31, 2006 increased by 107% to
$48.3 million compared to $23.3 million for 2005. The major increases came in
data library sales which were $13.9 million (29% of all 2006 sales) for the
year end December 31, 2006 compared to $8.7 million for 2005 (37% of all 2005
sales). This $5.2 million increase in data library sales were the direct
result of significant acquisitions of data libraries for $16.2 million in
November 2005 and seismic surveys of $29.5.

    
    For year ended December 31, 2006 (000's)
    -------------------------------------------------------------------------
    BlueGrouse Revenue               % of  Total                 % of  Total
     Analysis              2006          Revenue       2005          Revenue
    -------------------------------------------------------------------------
    Data Library      $     13,858            29  $      8,685            37
    -------------------------------------------------------------------------
    Brokerage               11,382            24        13,949            60
    -------------------------------------------------------------------------
    Multi-Client            22,396            46             -             -
    -------------------------------------------------------------------------
    Other                      696             1           625             3
    -------------------------------------------------------------------------

    Total             $     48,332           100  $     23,259           100
    -------------------------------------------------------------------------
    

    BlueGrouse generated net earnings of $2.5 million in the three month
period ended December 31, 2006 compared to earnings of $1.5 million during the
fourth quarter of 2005. Net earnings for the year ended December 31, 2006 were
$7.1 million compared to $3.2 million for the same period in 2005. Basic
earnings per share for the three months ended December 31, 2006 were $0.21 per
share compared to basic earnings of $0.14 for the same period in 2005, and for
the year ended December 31, 2006 basic earnings were $0.59 compared to
$0.54 per share in the same period in 2005. The weighted average shares
outstanding for the year ended December 31, 2006 were 12,046,888 basic and
15,120,404 diluted, compared to 6,032,039 basic and 6,974,264 diluted at
December 31, 2005.
    Funds from operations for the three months ended December 31, 2006 were
$9.2 million compared to $2.5 million for the same period in 2005. Funds from
operations for the year ended December 31, 2006 were $27.6 million compared to
$4.9 million for the same period in 2005. Basic funds from operations per
share for the three months ended December 31, 2006 were $0.76 compared to
$0.24 per share in the same period of 2005 and for the year ended December 31,
2006 were $2.30 compared to $0.81 per share in the same period in 2005.

    Non-GAAP Financial Measures

    The Company's continuous disclosure documents provide discussion and
analysis of "funds from operations". This financial measure does not have a
standard definition prescribed by GAAP in Canada and therefore is unlikely to
be comparable to similar measures disclosed by other companies. The Company
has included this non-GAAP financial measure because it is used by management,
investors, analysts and others as a measure of the Company's financial
performance. The Company's definition of funds from operations is cash flow
from operations as prescribed by Canadian GAAP, but excluding the impact of
changes in non-cash working capital. See the Consolidated Statement of Cash
Flows in the Consolidated Financial Statements for the Year Ended December 31,
2006. Funds from operations per share is defined as funds from operations
divided by the weighted average number of shares outstanding for the period.

    
    Reconciliation of Funds from Operations and Cash Flow from Operating
    Activities

                         For Three Months Ended      For Twelve Months Ended
                               December 31                 December 31
                      --------------------------- ---------------------------
                           2006          2005          2006          2005
                      --------------------------- ---------------------------

    Cash Flows from
     Operating
     Activities       $ 12,423,648  $    646,484  $ 33,011,984  $  3,076,177
    Changes in
     Non Cash Working
     Capital Items      (3,259,395)    1,863,857    (5,451,972)    1,796,150

                      --------------------------- ---------------------------
    Funds from
     Operations       $  9,164,253  $  2,510,341  $ 27,560,012  $  4,872,327
                      --------------------------- ---------------------------
                      --------------------------- ---------------------------
    

    PROPOSED ARRANGEMENT TRANSACTION

    On March 1, 2007, BlueGrouse announced that it had entered into an
agreement contemplating the acquisition by Divestco Inc. ("Divestco") of
BlueGrouse pursuant to a plan of arrangement (the "Arrangement"). Under the
Arrangement, each 3.2 shares of BlueGrouse will entitle the holder to receive
one common share of Divestco. The Arrangement is subject to the satisfaction
of certain conditions, including court, shareholder and regulatory approvals.
A meeting of holders of BlueGrouse shares will be called in due course to
consider the Arrangement.

    CORPORATE PROFILE

    BlueGrouse Seismic Solutions Ltd. is a Calgary-based company focused on
providing the oil and natural gas industry with quick, reliable access to
cost-effective, high-resolution seismic data. BlueGrouse has four main
components to its business model: Data Library, Multi-Client Services, Data
Brokerage and Data Management.
    BlueGrouse trades on the TSX Venture Exchange under the symbol BGH.

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

    Certain information contained herein may constitute forward-looking
statements under applicable securities laws. Such statements are subject to
known or unknown risks and uncertainties that may cause actual results to
differ materially from those anticipated or implied in the forward-looking
statements. Forward-looking statements are based upon management's
assumptions, expectations and estimates at the time that such statements are
made. BlueGrouse does not update forward-looking statements should
circumstances change or management's assumptions, or expectations change.

    
    BLUEGROUSE SEISMIC SOLUTIONS LTD.
    CONSOLIDATED BALANCE SHEETS
    -------------------------------------------------------------------------
                                                   December 31   December 31
                                                       2006          2005
    --------------------------------------------- ------------- -------------
                                                                   (restated)
    ASSETS
    CURRENT
      Cash                                        $  2,366,471  $    836,601
      Accounts receivable                           10,421,212    15,131,267
      Participation Surveys                             50,644     7,650,875
      Prepaid Expenses                                  77,518        58,235
    --------------------------------------------- ------------- -------------
                                                    12,915,845    23,676,978

    CAPITAL ASSETS                                     109,615        59,064
    DATA LIBRARY                                    35,950,284    21,664,866
    DEFERRED FINANCING COSTS                           279,710       487,472
    --------------------------------------------- ------------- -------------
                                                  $ 49,255,454  $ 45,888,380
    --------------------------------------------- ------------- -------------
    --------------------------------------------- ------------- -------------


    LIABILITIES
    CURRENT
      Accounts payable and accrued liabilities    $ 13,106,237  $ 13,975,828
      Income taxes payable                           1,723,226        30,792
      Deferred revenue                               1,076,450     8,738,324
      Due to shareholders                                    -       660,062
      Current portion of loan payable                1,400,000     2,500,000
    --------------------------------------------- ------------- -------------
                                                    17,305,913    25,905,006

    LOAN PAYABLE                                     2,250,000     2,500,000
    FUTURE INCOME TAXES                              2,476,580       201,580
    CONVERTIBLE DEBENTURES                           7,750,886     8,160,268
    --------------------------------------------- ------------- -------------
                                                    29,783,379    36,766,854
    --------------------------------------------- ------------- -------------
    NON CONTROLLING INTEREST                                 -       263,216
    --------------------------------------------- ------------- -------------
                                                    29,783,379    37,030,070
    --------------------------------------------- ------------- -------------

    SHAREHOLDERS' EQUITY
    SHARE CAPITAL                                    8,237,018     4,765,059
    CONTRIBUTED SURPLUS                                823,433       812,655
    RETAINED EARNINGS                               10,411,624     3,280,596
    --------------------------------------------- ------------- -------------
                                                    19,472,075     8,858,310
    --------------------------------------------- ------------- -------------
                                                  $ 49,255,454  $ 45,888,380
    --------------------------------------------- ------------- -------------
    --------------------------------------------- ------------- -------------



    BLUEGROUSE SEISMIC SOLUTIONS LTD.
    CONSOLIDATED STATEMENTS OF OPERATIONS & RETAINED EARNINGS
    -------------------------------------------------------------------------
                                                  For the Twelve Months Ended
                                                           December 31
                                                       2006          2005
    --------------------------------------------- ---------------------------

    REVENUE                                       $ 48,331,612  $ 23,258,843
    OPERATING EXPENSES:
      Amortization of data library                  15,166,198       857,003
      Cost of Sales                                 12,667,049    16,034,850
    --------------------------------------------- ---------------------------
                                                    27,833,247    16,891,853
    --------------------------------------------- ---------------------------
    GROSS MARGIN                                    20,498,365     6,366,990
    --------------------------------------------- ---------------------------
    EXPENSES
      General and administrative expenses            2,234,596       847,497
      Interest and bank charges                      2,029,675       240,024
      Salaries and benefits                          2,049,050     1,233,709
      Stock-based compensation                         140,055       430,923
      Amortization and depreciation                     34,079        23,094
      Amortization of deferred financing costs         207,762        23,874
    --------------------------------------------- ---------------------------
                                                     6,695,217     2,799,121
    --------------------------------------------- ---------------------------
    EARNINGS BEFORE INCOME TAXES AND
     NON CONTROLLING INTERESTS                      13,803,148     3,567,869
    --------------------------------------------- ---------------------------
    INCOME TAXES
      - current                                      1,791,230        30,436
      - future                                       2,275,000       201,580
    --------------------------------------------- ---------------------------
                                                     4,066,230       232,016
    --------------------------------------------- ---------------------------
    NON CONTROLLING INTEREST                         2,605,890        93,716
    --------------------------------------------- ---------------------------
    NET EARNINGS                                  $  7,131,028  $  3,242,137
    --------------------------------------------- ---------------------------
    --------------------------------------------- ---------------------------
    BASIC EARNINGS PER SHARE                      $       0.59  $       0.54
    --------------------------------------------- ---------------------------
    DILUTED EARNINGS PER SHARE                    $       0.51  $       0.46
    --------------------------------------------- ---------------------------
    --------------------------------------------- ---------------------------

    RETAINED EARNINGS (DEFICIT),
    Beginning of period                           $  3,280,596  $     58,858
    Net earnings                                     7,131,028     3,242,137
    --------------------------------------------- ---------------------------
                                                    10,411,624     3,300,995
    Dividends                                                -       (20,399)
    --------------------------------------------- ------------- -------------
    RETAINED EARNINGS, end of period              $ 10,411,624  $  3,280,596
    --------------------------------------------- ------------- -------------
    --------------------------------------------- ------------- -------------



    BLUEGROUSE SEISMIC SOLUTIONS LTD.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------
                                                    For Twelve Months Ended
                                                           December 31
                                                       2006          2005
    --------------------------------------------- ---------------------------
                                                                   (restated)
    CASH FLOWS FROM OPERATING ACTIVITIES
      Net earnings (loss)                         $  7,131,028  $  3,242,137
      Items not affecting cash
        Amortization and depreciation                   34,079        23,094
        Amortization of data libraries              15,166,198       857,003
        Non controlling interest                     2,605,890        93,716
        Future Income Taxes                          2,275,000       201,580
        Stock-based compensation expense               140,055       430,923
        Amortization of deferred financing costs       207,762        23,874
    --------------------------------------------- ---------------------------
                                                    27,560,012     4,872,327
      Changes in non cash working capital items
        Accounts receivable                          4,710,055    (8,429,950)
        Participation Surveys                        7,600,231    (7,650,875)
        Prepaid expenses                               (19,283)      (56,973)
        Accounts payable and accrued liabilities      (869,591)    6,682,018
        Income Taxes Payable                         1,692,434       (71,508)
        Future Income Taxes                                  -        (7,186)
        Deferred revenue                            (7,661,874)    7,738,324
    --------------------------------------------- ---------------------------
                                                    33,011,984     3,076,177
    --------------------------------------------- ---------------------------
    CASH FLOWS FROM INVESTING ACTIVITIES
      Cash acquired on acquisition                           -       479,327
      Purchase of capital assets                       (84,630)      (20,118)
      Purchase of data library                     (32,209,036)  (19,787,324)
      Disposal of data library                         260,210             -
    --------------------------------------------- ------------- -------------
                                                   (32,033,456)  (19,328,115)
    --------------------------------------------- ---------------------------
    CASH FLOWS FROM FINANCING ACTIVITIES
      Advances from (to) shareholder                  (660,062)     (279,010)
      Advances from (to) related party                       -       182,088
      Increase/(Decreased) in Loan Payable          (1,350,000)    4,000,000
      Convertible Debenture                             (9,382)    8,542,000
      Deferred financing costs                               -      (405,299)
      Acquisition of SilverTip                        (371,896)            -
      Issuance of share capital                      2,942,682     4,462,059
      Dividends                                              -       (20,399)
    --------------------------------------------- ---------------------------
                                                       551,342    16,481,439
    --------------------------------------------- ---------------------------
    CHANGE IN CASH POSITION                          1,529,870       229,501
    CASH, beginning of period                          836,601       607,100
    --------------------------------------------- ---------------------------
    CASH, end of period                           $  2,366,471  $    836,601
    --------------------------------------------- ---------------------------
    --------------------------------------------- ---------------------------
    OTHER INFORMATION
      Income taxes paid                           $     38,369  $     12,006
      Interest paid                               $  1,945,063  $    132,390
    --------------------------------------------- ---------------------------
    --------------------------------------------- ---------------------------
    

    %SEDAR: 00022502E




For further information:

For further information: Todd A. Chuckry, President and Chief Executive
Officer, (403) 264-4224 or Stan G. Weber, Chief Financial Officer, (403)
264-4224

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BLUEGROUSE SEISMIC SOLUTIONS LTD.

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