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Press release from Marketwire

Strong Customer Demand Drives Poseidon Concepts Corp.'s Accelerated Tank Build and Increased EBITDA Guidance

Wednesday, January 11, 2012

Strong Customer Demand Drives Poseidon Concepts Corp.'s Accelerated Tank Build and Increased EBITDA Guidance17:54 EST Wednesday, January 11, 2012CALGARY, ALBERTA--(Marketwire - Jan. 11, 2012) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWPoseidon Concepts Corp. (TSX:PSN) ("Poseidon" or the "Company") is pleased to provide an operational update that includes an accelerated tank build and upwardly revised 2012 EBITDA guidance driven by continued strong growth in the Company's North American fluid handling business. Poseidon's Board of Directors has approved a 2012 capital budget of $60 million for further tank construction and new product development. Included in the budget will be the expansion of the Company's tank fleet to 400 units by June 30, 2012 and EBITDA is now estimated at $170 million for 2012."Our continued pace of development reflects the awareness and acceptance of Poseidon's service offering by an increasing number of large E&P companies across North America," said Lyle Michaluk, Poseidon's Chief Executive Officer. "The increased EBITDA expected in 2012 further solidifies the sustainability of Poseidon's monthly dividend."Poseidon's next monthly dividend payment of $0.09 per share is scheduled for January 16, 2012 to shareholders of record on December 30, 2011.Operational UpdatePoseidon had a very successful 2011 as it expanded its fleet of innovative modular fluid tanks to 240 units by year-end, with operations extending into 16 U.S. states, up from 14 states at the end of October. Poseidon is now active in the large majority of unconventional plays across western Canada and the United States. The Company recently commenced operations in a number of new unconventional plays, including the Mississippi Lime in Oklahoma, the San Joaquin Basin in California, and the Green River Basin in Wyoming.The Company has continued to add to its customer base, with a number of large U.S. independents signing minimum commitment contracts, each covering multiple tanks for periods of one to three years. The largest of these commitments to date covers activities across three states for a major North American producer and will provide $49 million in revenue over the next three years. In addition, numerous existing customers are increasing their use of Poseidon tanks in response to the strong performance they have experienced to date. "Poseidon is growing in step with its customers as they accept us as a proven solution in their fluid management cycle," said Michaluk. "More and more customers are making the Poseidon fluid handling approach integral to their operations and are applying our product offerings to additional plays and operating regions."In the past 30 days, 10 existing customers have increased their number of Poseidon tanks deployed. Entering 2012 Poseidon has a customer roster totalling nearly 100 companies and is demonstrating the system to multiple new customers.At present Poseidon has secured customer commitments for approximately 60 percent of the current tank fleet, which represents rental revenue of approximately $150 million through year-end 2012. Importantly, over 40 of the tanks currently committed are being used as central fluid storage, whereby producers store fluid for repeated use on multi-well drilling projects. The widespread use of this application strengthens Poseidon's overall business model and increases the Company's revenue stability.In addition, the E&P sector is continuing its shift away from the use of lined pits to store fluid for the largest fracturing jobs. Regulatory authorities in a number of U.S. states are discouraging the use of lined pits and Poseidon's 41,000-barrel Atlantis model is finding growing acceptance as an alternative.Approximately 80 percent of Poseidon's current tank fleet is deployed in the United States and the Company anticipates that the majority of 2012 growth will occur in that market. Western Canada continues to provide a steady, cash flow-generating business, with important new customers being added, including several large intermediate producers.Poseidon estimates that approximately 75 percent of the current fleet is deployed to oil-focused plays offering strong economics.2012 Capital Program and GuidanceThe Company's expanded 2012 capital program of $60 million reflects the continued acceptance of Poseidon's service offering, particularly in the United States, with growing spot market demand and several new multi-year contracts necessitating an accelerated build program.The planned increase in the tank fleet to 400 systems at mid-year will expand fleet-wide storage capacity to approximately 11 million barrels from approximately six million barrels at December 31, 2011. Poseidon continues to estimate that its systems are serving less than five percent of the fluid handling activity at oil and natural gas well sites across North America.Poseidon's full-year 2012 EBITDA is now expected to be approximately $170 million, a 31 percent increase from previous guidance of $130 million. Forecasts for 2011 EBITDA remain unchanged at this time and the Company's 2011 earnings release is anticipated in late March.POSEIDON CONCEPTS CORP. IS A PUBLICLY TRADED CANADIAN ENERGY EQUIPMENT AND SERVICES COMPANY THAT PROVIDES AN INNOVATIVE FLUID HANDLING SYSTEM TO THE OIL AND NATURAL GAS INDUSTRY ACROSS NORTH AMERICA. POSEIDON HAS APPROXIMATELY 74.7 MILLION COMMON SHARES ISSUED AND OUTSTANDING, WHICH TRADE ON THE TSX UNDER THE SYMBOL "PSN". FURTHER INFORMATION ON POSEIDON'S BUSINESS AND OPERATIONS CAN BE FOUND ON POSEIDON'S WEBSITE ( www.poseidonconcepts.com ).Reader Advisory This news release contains certain forward-looking statements and other information (collectively "forward-looking information") about our current expectations, estimates and projections. Forward-looking information in this news release is identified by words such as "anticipate", "believe", "expect", "plan", "forecast", "target", "could", "focus", "vision", "goal", "proposed", "scheduled", "milestone", "outlook", "potential", "may", "looking forward to", or similar expressions and includes suggestions of future outcomes, including statements about our growth strategy and related milestones and schedules, forecast operating and financial results, planned capital expenditures, future dividends, future use and development of technology and projected increasing shareholder value. Readers are cautioned not to place undue reliance on forward-looking information as our actual results may differ materially from those expressed or implied in the forward-looking statements. Developing forward-looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to Poseidon and others that apply to the industry generally. The factors or assumptions on which the forward-looking information is based include without limitation: assumptions inherent in our current guidance, including foreign exchange and interest rates; our projected capital investment levels; the flexibility of capital spending plans and the associated source of funding; our ability to generate sufficient cash flow from operations to meet our current and future obligations; our expectations of the demand for tank systems and the general activity of the oil and gas industry; and other risks and uncertainties described from time to time in the filings we make with securities regulatory authorities.Actual results could differ materially from those currently anticipated due to a number of factors, risks and uncertainties. Such risks and uncertainties include, without limitation, risks associated with dependence on manufacturers of the Poseidon tank systems; operating risk liability; demand for Poseidon's tank systems; levels of competition in the fracturing fluid storage industry; the ability of Poseidon to attract and retain clientele; the ability of Poseidon to fund its ongoing capital requirements; delays resulting from or inability to obtain required regulatory approvals; the impact of general economic conditions in Canada, the United States and globally; industry conditions; changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced; increased competition; the lack of availability of qualified personnel or management; fluctuations in foreign exchange or interest rates; and stock market volatility. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributed to Poseidon or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional information on the foregoing risks and other factors that could affect Poseidon's operations and financial results are on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Poseidon does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. This news release contains the term EBITDA which is defined as earnings before interest, taxes, depreciation and amortization. EBITDA as presented does not have any standardized meaning prescribed by international financial reporting standards (IFRS) and therefore it may not be comparable with the calculation of similar measures for other entities. Management uses EBITDA to analyze the operating performance of the business. EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS.FOR FURTHER INFORMATION PLEASE CONTACT: Lyle D. MichalukPoseidon Concepts Corp.Chief Executive Officer403-262-9280ORMatt C. MacKenziePoseidon Concepts Corp.Chief Financial Officer403-206-6107www.poseidonconcepts.com