Enerchem International Inc. releases financial results



    CALGARY, March 19 /CNW/ - Enerchem International Inc. Reports Financial
Results for the Three Months and Year Ended December 31, 2006.

    
    Financial highlights (unaudited)
    (in Cdn $ 000's except per share
     amounts)

                                       Three Months Ended       Year Ended
                                           December 31         December 31

                                          2006      2005      2006      2005
    -------------------------------------------------------------------------

    Revenues                            24,199    31,380   107,746   109,132
    -------------------------------------------------------------------------

    Net earnings from continuing
     operations                            373     1,701     5,931     3,885

    Net earnings from discontinued
     operations                              -     3,885         -     4,290
    -------------------------------------------------------------------------
    Net earnings for the period            373     5,586     5,931     8,175
    -------------------------------------------------------------------------

    Basic earnings per share
      Continuing operations               0.02      0.11      0.39      0.26
      Discontinued operations                -      0.26         -      0.29
    -------------------------------------------------------------------------
    Basic earnings per share              0.02      0.37      0.39      0.55
    -------------------------------------------------------------------------

    Diluted earnings per share
      Continuing operations               0.02      0.11      0.39      0.26
      Discontinued operations                -      0.26         -      0.29
    -------------------------------------------------------------------------
    Diluted earnings per share            0.02      0.37      0.39      0.55
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    EBITDA from continuing operations    1,535     2,896    10,356     6,974
    -------------------------------------------------------------------------
    EBITDA per share from continuing
     operations                           0.10      0.20      0.68      0.47

    EBITDA is a non-GAAP measure which the Company defines as earnings before
    interest expense, taxes, depreciation, amortization, accretion expense
    and write-downs.
    

    Enerchem International Inc. today announced its financial results for the
three months and year ended December 31, 2006.

    Overview

    2006 proved to be a very interesting year from an operational
perspective. During the first half of the year we experienced high levels of
demand for our products as we benefited from record oilfield activity in most
areas of the Western Canadian Sedimentary Basin ("WCSB"). However during the
second half of 2006, the lingering effects of warmer winter conditions over
recent years combined with the build-up of higher than normal gas inventory
levels contributed to weaken near-term natural gas prices and precipitated a
slow-down in oilfield activity. While the shallow gas areas of the WCSB saw
reduced activity levels throughout the second half of 2006, the deeper more
technical areas serviced by the Company experienced a more gradual slowdown
which started part way through the 4th quarter of 2006.
    However, despite these changes in activity levels, we were able to
establish a number of new financial and operational records. First and
foremost, we completed another year of operating our plants lost time incident
free. This culminated to our plants operating lost time incident free from the
start of their respective operations under the Company. We achieved record
earnings from continuing operations of almost $6.0 million, EBITDA, which
represents earnings from continuing operations before interest, taxes,
depreciation, amortization, accretion expense and write-downs, improved to
over $10.0 million, return on capital employed of almost 15% and we exited the
year with essentially no debt and working capital of $20.7 million. The
acquisition of Millard Trucking during the second quarter provided new sources
of third party revenue and also helped to meet our own internal trucking
requirements

    Continued Improvement

    Over the past year we implemented several significant strategic
initiatives focused on increasing plant efficiencies and improving overall
operational performance.
    In Sundre we completed the automation of fractionation towers two and
three, which provided a 14% increase in our finished product output. The
plant's blend facility was completed during the second quarter of 2006 and has
improved the return on our by-products that are sold through the energy
marketing group. During the third quarter of 2006, we commenced with the
construction of our flowback cleaning facility which will be operational late
in the 1st quarter 2007. We anticipate that this facility will contribute to
reducing our overall feedstock costs and provide competitive advantages. In
2007, we will be replacing the older style salt bath heaters used by the
Sundre plant with a new higher temperature rated heating system that will
reduce the plant's energy consumption and increase its production throughput.
    In Slave Lake, we completed the refrigeration plant and storage bullet
which provided an incremental revenue stream from the sale of liquid petroleum
gas and reduced plant emissions. In 2007, our capital program for the Slave
Lake plant will be focused on the construction of a blending facility, that we
anticipate will be pipeline connected, to complement our energy marketing
activities and the construction of a crude oil water-wash process that we
expect will reduce our maintenance costs between turnarounds.

    Cautiously Optimistic

    The current forecast for drilling activity in 2007 ranges from 19,000 to
21,000 wells to be drilled in the WCSB. Notwithstanding the forecasted drop in
wells drilled when compared to 2006, the Petroleum Services Association of
Canada (PSAC) predicts that operating days will go from approximately 175,000
to 159,000, which indicates a greater focus by the oil and gas producers on
deep well drilling activities. As a result, this should provide normal
anticipated opportunities for our products and services in 2007.

    Enerchem International Inc. is a manufacturer and distributor of
hydrocarbon drilling and fracturing fluids designed to provide cost effective
solutions to the upstream oil and gas industry and specialty solvents to help
resolve production and processing problems to the downstream producers. The
Company also provides energy marketing services and, through its wholly-owned
subsidiary company, Millard Trucking Ltd., provides fluid transportation and
other related oilfield services. The Company's common shares trade on the
Toronto Stock Exchange under the symbol "ECH".

    Certain statements contained in this press release, including statements
which may contain words such as "could", "should", "expect", "anticipate",
"believe", "will", and similar expressions and statements relating to matters
that are not historical facts are forward looking statements. Such forward
looking statements involve known and unknown risks and uncertainties which may
cause the actual results, performances or achievements of Enerchem 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 oil and gas activity levels, political
and economic conditions, the demand for services provided by Enerchem,
Enerchem's ability to attract and retain key personnel and other factors.

    Additional information on Enerchem International Inc., including our 2006
Annual Report may be viewed at our website at: www.enerchem.com or by visiting
www.sedar.com

    THE TSX HAS NEITHER APPROVED NOR DISAPPROVED THE INFORMATION CONTAINED
    HEREIN.

    Enerchem International Inc.

    Per: signed "Douglas F. Robinson"
    ---------------------------------
    President and CEO





For further information:

For further information: Mr. Douglas F. Robinson, President and CEO,
Telephone: (403) 269-1500, Fax. (403) 269-1559, E-mail drobinson@enerchem.com;
or Mr. Brian Zubach, Chief Financial Officer, Telephone: (780) 980-1682, Fax.
(780) 980-2610, E-mail bzubach@enerchem.com

Organization Profile

ENERCHEM INTERNATIONAL INC.

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