FOR IMMEDIATE RELEASE: February 2, 2007
Wavefront Announces First Quarter Results
EDMONTON, Alta February 2,
2007/ Wavefront Energy and Environmental Services Inc., a provider
and licensor of its proprietary fluid flow process for improved oil
recovery (Powerwave™)
and groundwater remediation (Primawave™)
announces its financial and operating results for the first
quarter ended November 30, 2006.
Revenue for the three months ended November 30, 2006 was $188,857
contrasted to revenue of $95,357 for the comparative period ended
November 30, 2005. The increase is principally a result of the
increase in interest income generated from guaranteed investment
certificates that resulted from recent private placements.
During the current reporting period the Company has focused its
resources on Powerwave showcasing the process in oilfields where the
Company has acquired mineral rights. Approximately 18% of revenues
for the quarter were generated from activities associated with
Powerwave, and 21% of revenue was generated from activities related
to the activities and production of Rogers County, Oklahoma and
Greentree farm-in. Gross profit as a percentage of revenue was 87%
for the three month period and is greater than that for the
comparative period of last year of 41% principally due to increased
Powerwave and interest income revenues that have little direct
costs.
The Company’s consolidated net loss for the three months ended
November 30, 2006 was $1,047,805 or $0.02 per share compared to a
consolidated net loss for November 30, 2005 of $351,948, or $0.01
per share. The increases in net losses is primarily due to increases
in wages expense of $509,972, travel and promotion of $95,695,
professional fees of $89,520, and consulting fees of $51,532, which
relate to: (i) the inclusion of the fair value of stock option
valuation as an employee wage expense approximated $391,213, (ii)
the involvement in developing the Rogers County oilfield to showcase
Powerwave, (iii) business development efforts in the United States
and to better react to operations in Oklahoma the Company opened and
staffed an office in Cypress, Texas, and (iv) the Company’s
involvement in developing the Rogers County oilfield and efforts to
acquire additional oilfields to showcase Powerwave.
As at November 30, 2006, current assets totaled $12,569,425 as
compared to $14,778,865 at August 31, 2006. The Company had working
capital of $13,600,455 for the reporting period as compared to
$13,206,359 at August 31, 2006. The increase in working capital is a
result of closing a non-brokered private placement and the exercise
of convertible securities. Total assets have decreased to
$17,515,273 from $18,704,396.
The development of mineral property interests will continue to be a
cornerstone of the Company’s strategy in showcasing Powerwave and
ensuring a growing revenue stream. Management expects the financial
results to move towards profitability as oil production revenues
from mineral rights increase. As results from Powerwave projects are
received, it is anticipated that Powerwave licensing royalties will
grow.
The above financial highlights should be read in conjunction with
the unaudited consolidated financial statements and management
discussion and analysis of results for the Company’s most recently
completed quarter, ended November 30, 2006, which have been filed of
SEDAR.
The Company would also like to announce that a new Powerwave
downhole tool developed in collaboration with our licensed provider
has been deployed in Rogers County. The tool, a mechanical hybrid of
the Company’s electrically controlled “Dragonfly” tool, is designed
for permanent applications in water injection wells used during
secondary oil recovery. Although the electrically powered Dragonfly
offers full operational control, the advantages of a mechanical tool
include both ease and cost of deployment.
Wavefront President and CEO Brett Davidson stated, “The Dragonfly
tools installed in Rogers County have provided consistent increases
in the rate of water injection over standard injection practices at
the same supply relative pressure. We are very encouraged by the
Dragonfly’s two fold increase in injection rate from 90 to 188
barrels of water per day. For a production company the ability to
inject larger volumes of water into a producing formation is an
important operational objective as processing rate directly affects
production revenue. Volumetrically, where input equals output,
increasing input by a factor of two also increases output by a
factor of two. If the proportion of water and oil of the output
remains constant or tends toward more oil, the production company
would recognize greater production revenue”.
Mr. Davidson further commented, “The deployment of the mechanical
waterflood tool developed under the collaboration agreement with our
licensed provider is another positive step toward full global
commercialization of Powerwave. Significant engineering effort went
into development of the tool and the Company anticipates positive
results that mimics those generated by the Dragonfly. The success of
the mechanical tool is anticipated to increase business development
opportunities with companies who operate marginal oil fields, such
as Rogers County, where typical oil well production is less than two
barrels of oil per day”.
About Wavefront Energy and Environmental
Services Inc.
Wavefront develops, markets, and licenses proprietary technologies
in the energy and environmental sectors. The Company’s Powerwave
Process for fluid flow optimization has been demonstrated to
increase oil recovery. Within the environmental sector, the
Primawave Process accelerates contaminant recovery and improves
in-ground treatment of groundwater contaminants thereby reducing
liabilities and restoring the site to its natural state more rapidly.
For further information please contact:
Brad Paterson, CFO and Director
780-486-2222 ext. 224 Tel
investor.info@onthewavefront.com
On behalf of the Board Of Directors,
Wavefront Energy & Environmental Services Inc.
“D. Brad Paterson” (signed)
D. Brad Paterson, CFO and
Director
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