Crossfire Energy Services announces Q2 2007 operating results



    CALGARY, Aug. 29 /CNW/ - Crossfire Energy Services Inc., ("Crossfire" or
the "Company") (TSX Venture: CFE) announced its consolidated operating and
financial results for the three and six month periods ending June 30, 2007.
    For the three-month period ending June 30, 2007, Crossfire reported
revenues of $4.9 million compared with revenue of nil for the same period last
year. The net loss for the period was $730 thousand or ($0.04) per share
versus a net loss of $32 thousand or ($0.01) per share for the same period
last year.
    For the six-month period ending June 30, 2007, Crossfire reported
revenues of $15.6 million compared with revenue of nil for the same period
last year. The net income for the period was $255 thousand or $0.01 per share
versus a net loss of $82 thousand or ($0.02) per share for the same period
last year.
    "These second quarter results fell below the financial guidance provided
by Management on September 7, 2006 primarily as a result of continued weakness
in natural gas commodity prices contributing to slower than anticipated
activity levels in the Company's fabrication services operations," noted Dean
Bethune, Crossfire's President and CEO. "To a lesser extent, we have also seen
the deferral of some capital spending decisions by customers of the Company's
construction services operation due to this year's longer than anticipated
spring thaw."

    

    Q2 - 2007 FINANCIAL HIGHLIGHTS
    -------------------------------------------------------------------------
    Selected Financial            Three Month Periods      Six Month Periods
     Information                     ending June 30          ending June 30
    -------------------------------------------------------------------------
    ($ thousands, except per
     share amounts)                 2007        2006        2007        2006
    -------------------------------------------------------------------------

    Revenue
       Construction Services       2,900           -      10,164           -
       Fabrication Services        1,989           -       5,453           -
                              -----------------------------------------------
                                   4,888           -      15,617           -
                              -----------------------------------------------

                              -----------------------------------------------
    EBITDA(1)                       (632)        (28)      1,204         (75)
                              -----------------------------------------------
    EBITDA(1) per share
       Basic                       (0.03)          -        0.06       (0.01)
       Diluted                     (0.03)          -        0.05       (0.01)

                              -----------------------------------------------
    Net income (loss)               (730)        (32)        255         (81)
                              -----------------------------------------------
    Net income (loss) per
     share
       Basic                  $    (0.04)    $ (0.01)       0.01       (0.02)
       Diluted                         -           -        0.01           -

    Weighted average shares
     outstanding
     (thousands)              20,098,768   4,597,546  20,067,623   4,597,546
    Fully diluted shares
     outstanding
     (thousands)              23,390,177   9,466,455  23,359,032   9,466,455

    (1) EBITDA is defined as earnings before interest, taxes, depreciation,
        amortization and stock-based compensation.

    EBITDA is not a recognized measure under Canadian Generally Accepted
    Accounting Principals
    

    Outlook

    Industry consensus among our peers and customers indicates that industry
activity levels are not expected to improve until the fourth quarter of 2007.
Any substantial increases are not anticipated until the second and third
quarters of 2008. The Company expects a softening of field activities to
continue through and including the third quarter of 2007. Declines in natural
gas commodity prices are expected to depress sales of traditional oilfield
equipment in the Fabrication Services division. Commodity prices are not
expected to increase significantly until the fourth quarter of 2007 and or the
first quarter of 2008. Declines in activity levels in the Company's
Construction Services division are anticipated to continue to depress
operating margins through the fourth quarter of 2007.
    However, many industry analysts anticipate that declining natural gas
storage levels, combined with recent declines in Canadian gas production and
enhanced producer economics, point to a recovery in activity levels in the
Western Canadian basin in the first quarter of 2008.
    "An important part of our growth strategy has been to diversify our
revenue base so that Crossfire is less dependant on the market forces
impacting any one particular region," noted Mr. Bethune. "Our acquisition of
Micoda Process Systems earlier this month expands the geographic scope of the
Company beyond the borders of Canada"
    Micoda is recognized for their expertise in production testing and under
balanced drilling (UBD) packages. Micoda has worked with international service
companies, and national oil companies in over twenty two countries including
the United States, Middle East and North Africa, Iran and the former Soviet
Union. The addition of their 107,000 square foot facility in southern Alberta
expands the Company's capacity as Crossfire continues to focus on
opportunities tailored to unconventional resource projects.

    Based on the slower than anticipated recovery in the domestic market
segments served by the Company Crossfire is amending the previous 2007
financial guidance that it provided to investors last September as follows:

    
                              Q1 2007   Q2 2007   Q3 2007   Q4 2007    2007
                               Actual    Actual   Revised   Revised  Revised
                                 $         $         $         $        $


        Revenues               10,729     4,888    8,825     12,845   37,287

        EBITDA                  1,816      (621)     225      1,361    2,781

        EBITDA/Share(1)(2)       0.09     (0.03)    0.01       0.07     0.14

        (1) Premised upon average weighted shares outstanding during the
            periods.
        (2) EBITDA is defined as earnings before interest, taxes,
            depreciation amortization and stock-based compensation. EBITDA is
            not a recognized measure under Canadian Generally Accepted
            Accounting Principles.

    The Company will host a conference call later this morning at 11:00 a.m.
Eastern Time to discuss the recent acquisition of Micoda Process Systems Inc.
and the effect the acquisition is expected to have on Crossfire's future
domestic and international operations. The Company's Consolidated Q2 2007
financial statements and Management's Discussion and Analysis can be found on
the Company's web site and SEDAR.

    Live Call Number      416-644-3415 or 1-800-732-9303
    Conference Replay     1-877-289-8525
    Pass Code             21244874 followed by the number sign

    
    About Crossfire Energy Services

    Crossfire Energy Services is a full-service provider of design,
fabrication, construction and installation of oilfield facilities and carries
on business under the name Crossfire Energy Services(TM). The Company's
success is achieved through a commitment to building long-term relationships
with clients, employees and investors. Crossfire trades on the TSX Venture
Exchange under the symbol "CFE".

    The TSX Venture has in no way passed upon the merits of the contents nor
    approved or disapproved the contents of this press release. The TSX
    Venture does not accept responsibility for the adequacy or accuracy of
    this release.





For further information:

For further information: Dean Bethune, President & CEO, Crossfire Energy
Services Inc., Suite 1700, 800 - 6th Avenue SW, Calgary, Alberta, T2P 3G3,
dbethune@crossfireenergy.ca, www.crossfireenergy.ca; A. Scott Hamilton, Chief
Financial Officer, Crossfire Energy Services Inc., Suite 1700, 800 - 6th
Avenue SW, Calgary, Alberta, T2P 3G3, shamilton@crossfireenergy.ca,
www.crossfireenergy.ca

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CROSSFIRE ENERGY SERVICES INC.

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