Enerchem International Inc. Releases Financial Results



    Enerchem International Inc. Reports Financial Results for the Three
    Months and Year Ended December 31, 2007

    CALGARY, March 19 /CNW/ -

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

                                       Three Months Ended       Year Ended
                                           December 31         December 31

                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Revenues                            25,133    24,199    80,300   107,746
    -------------------------------------------------------------------------

    Net earnings (loss)
     for the period                        643       373    (4,481)    5,931
    -------------------------------------------------------------------------

    Earnings (loss) per share
      Basic                               0.04      0.02     (0.29)     0.39
    -------------------------------------------------------------------------
      Diluted                             0.04      0.02     (0.29)     0.39
    -------------------------------------------------------------------------

    EBITDA                                 920     1,535     4,073    10,356
    -------------------------------------------------------------------------
    EBITDA per share                      0.06      0.10      0.27      0.68
    -------------------------------------------------------------------------
    

    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, 2007.

    Overview

    Oilfield activity levels in the Western Canadian Sedimentary Basin
("WCSB") and overall industry conditions provided a challenging business
climate for oil and gas service companies in 2007. Much of the decline in
activity levels affecting the WCSB in 2007 was precipitated by the significant
build up in North American natural gas inventories over the past six quarters,
which in turn influenced the continuing weakness in natural gas prices to
levels that were economically unattractive to support gas drilling programs in
western Canada. As a result, overall drilling rig utilization rates averaged
42% in 2007 compared to 55% in 2006. Adding more uncertainty late in 2007 was
the announcement of the new Alberta Royalty Program which had the effect of
curbing oilfield activity in Alberta during the fourth quarter.
    The effect of the foregoing largely contributed to the 25% decline in the
Company's consolidated revenues in 2007 to $80,300,000 from $107,746,000 in
2006 and net loss for the year ended December 31, 2007 of $4,481,000 compared
to net earnings of $5,931,000 in 2006. The Company's net loss in 2007 included
a goodwill impairment of $6,050,000 which resulted from management's
assessment of the impact of reduced oilfield activity levels, the industry's
expectations of significantly reduced activity levels in 2008 and the overall
decline in the Company's market capitalization.
    For the three months ended December 31, 2007, consolidated revenues
increased by 4% to $25,133,000 from $24,199,000 for the same period last year
and net earnings for the fourth quarter of 2007 were $643,000 compared to
$373,000 for the comparative quarter in 2006. For the fourth quarter of 2007,
net earnings benefited from a future income tax recovery associated with
substantively enacted changes in the Canadian federal tax rates over the next
five years.

    Strategic Initiatives

    Over the past months, we have directed significant resources and capital
to make the necessary infrastructure and plant optimization improvements
focused on aligning our operations to the achievement of our strategic goals.
    In Slave Lake, the desalter has been installed at the refinery and we
anticipate that commissioning will be completed prior to the end of the first
quarter of 2008. The desalter will provide the benefit of reducing the flow of
impurities found in crude oils through the refinery and thereby reduce overall
repair and maintenance costs at this facility. Our new blending operation
located at the Slave Lake refinery has been completed and is also in the final
stages of commissioning. We anticipate that the blending facility will be
pipeline connected prior to the end of the first quarter of 2008. This project
will significantly reduce transportation costs associated with the hauling of
by-products from this facility and provide enhanced blending opportunities for
the Company's energy marketing business segment.
    In Sundre we successfully completed the construction and commissioning of
the flow-back cleaning facility. While, during 2007, we encountered some minor
start-up issues with this facility, we are pleased with the results achieved
in connection with the facilities ability to clean and re-cycle used
fracturing fluid ("flowback") and the Sundre refinery's ability to use the
clean flowback as a crude oil substitute in the manufacture of a premium
fracturing fluid.
    In addition, the automation of the entire Sundre facility was completed
in 2007 contributing to significantly increase finished product yield. In
connection with the installation of the new heaters at the Sundre plant,
during commissioning the heaters were unable to meet the required operating
parameters and as a result we are still in the process of completing this
project. The delay in completing this project affected our ability to fully
utilize the refinery for the purpose of processing flowback during January
2008. While the Sundre refinery is currently operating and flowback is being
processed through the facility, its production capacity is presently
restricted to two of its available three towers. We anticipate the Sundre
refinery will be fully operational by mid-year 2008.

    Outlook

    Industry expectations for activity levels in the WCSB fall in the range
of 13,500 to 15,300 wells to be drilled in 2008, compared to the 19,144 wells
drilled in 2007. In addition, average rig utilization rates are expected to be
at 35% in 2008 compared to 42% in 2007.
    This bearish economic outlook for oilfield activity combined with current
industry conditions has created a very aggressive competitive landscape
dominated by substantial pressures on pricing. As a result, we anticipate that
2008 will be as challenging as the past year.
    In 2008, however, we will be closer to achieving certain of our
fundamental business strategies which we anticipate will contribute to improve
our overall performance and competitive capabilities in a year where the
business environment may be less favourable than in previous years.
Notwithstanding, we continue to maintain a strong balance sheet with a focused
management team and are well positioned to take advantage of opportunities
that may develop.

    Conference Call

    Mr. Doug Robinson, President and Chief Executive Officer and
Mr. Brian Zubach, Chief Financial Officer, will host a conference call on
Thursday, March 20, 2008 at 9:00 a.m. MST (11:00 a.m. EST) to discuss the
Company's results for the Fourth Quarter and Year End 2007.
    To access the conference call, contact the conference call operator at 
1-800-731-6941 or in the Toronto area 416-644-3423 approximately 10 minutes
prior to the calls start time and ask for the "Enerchem International Inc. -
Fourth Quarter and Year End 2007 Conference Call".
    A replay of the conference call will be available until March 27, 2008 by
dialing 1-877-289-8525 (passcode: 21266281 followed by the pound sign) or in
the Toronto area at 416-640-1917 (passcode: 21266281 followed by the pound
sign).

    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., 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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