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Press release from CNW Group

Canyon Reports Second Quarter 2012 Results

Thursday, August 02, 2012

Canyon Reports Second Quarter 2012 Results20:43 EDT Thursday, August 02, 2012CALGARY, Aug. 2, 2012 /CNW/ - Canyon Services Group Inc. TSX: FRC ("Canyon") is pleased to announce its second quarter 2012 results.  The following should be read in conjunction with the Management's Discussion and Analysis, the Condensed Consolidated Interim Financial Statements and notes of Canyon Services Group Inc. for the three and six months ended June 30, 2012 and should also be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2011, and which are available on SEDAR at www.sedar.comHIGHLIGHTS SUMMARYThe main operating and financial highlights for the second quarter 2012 are as follows (000's of dollars except for horsepower amounts):Although industry activity is down year-over-year, Canyon continues to grow its market share in Canada.In Q2 2012, jobs completed and consolidated revenues increased by 58% and 66% to 251 and $37,974 respectively from 159 and $22,886 respectively in Q2 2011.In Q2 2012, revenues were impacted by modest price decreases as E&P companies adjusted capital programs in response to the current uncertain outlook for oil and natural gas liquids prices.  With approximately 90% of consolidated revenues derived from hydraulic fracturing services, the average fracturing revenue per job decreased to $212,281 in Q2 2012 from $245,778 in Q2 2011.  This decrease is attributable both to price pressure and job mix.Even with higher revenues in the current quarter, the loss and comprehensive loss remained flat at $6,940 (loss of $0.11 per share, diluted) in Q2 2012 compared to $6,639 (loss of $0.11 per share, diluted) in Q2 2011.  Offsetting the higher revenues were lower field margins due to pricing, higher depreciation and amortization expense and an increase in fixed costs to support the Company's expanded equipment fleet.Canyon remains in a very strong financial position with available cash of $23 million in addition to available undrawn credit facilities of $60 million and working capital of $43 million, including cash, as at June 30, 2012.On June 19, 2012, Canyon declared a quarterly dividend of $0.15 per common share, or $9.2 million, which was paid to shareholders on July 26, 2012.OVERVIEW OF SECOND QUARTER 2012       000's except per share, job amounts and hydraulic pumpingcapacity(Unaudited)Three Months EndedJune 30 Six Months EndedJune 30 20122011 20122011Consolidated revenues$37,974$22,886 $173,909$121,923Profit (loss) and comprehensive income (loss)($6,940)($6,639) $30,227$23,477 Per share-basic($0.11)($0.11) $0.49$0.39 Per share-diluted($0.11)($0.11) $0.48$0.37EBITDA before share-based payments(1)($1,552)($3,084) $56,562$44,863Funds from operations(1)$2,723$1,199 $49,306$38,973Total jobs completed (2)251159 1,185895Consolidated average revenue per job (2)$162,034$147,078 $150,746$137,417Average fracturing revenue per job$212,281$245,778 $227,313$203,113Hydraulic Pumping Capacity      Average HHP194,000125,500 185,000123,000 Exit HHP218,000125,500 218,000125,500Capital expenditures$20,653$29,190 $54,779$52,333   000's(Unaudited)As atJune 30, 2012As atDecember 31, 2011Cash balance, net of loans and borrowings (3)$23,141$42,481Working capital$43,027$67,009Note (1): See Non-GAAP MeasuresNote (2): Includes all jobs from each service line, specifically hydraulic fracturing; coiled tubing; nitrogen fracturing; acidizing and remedial cementingNote (3): Includes current and long-term portionsIn Q2 2012, jobs completed and consolidated revenues increased by 58% and 66% respectively compared to Q2 2011.  Nevertheless, operating results were lower than expected in the quarter as extremely wet weather in June deferred several projects into the third quarter.  In addition, the recent softening in oil and natural gas liquids prices resulted in sluggish producer activity and modest pricing pressure.  For the six months ended June 30, 2012, jobs completed and revenues increased by 27% and 43% respectively compared to the comparable period of 2011.With low natural gas prices prevailing over the past year, industry activity to date in the Western Canadian Sedimentary Basin ("WCSB") has been supported by strong oil and NGL prices with a focus by Exploration and Production ("E&P") companies on emerging oil and liquids rich natural gas plays, including the Duvernay shale, Cardium and Slave Point oil, where Canyon is currently active.  Oil and natural gas liquids directed drilling activity now accounts for over 80% of the wells being drilled in the WCSB.  However, since May 2012 oil and natural gas liquids prices have experienced considerable volatility, with a downward bias, as a result of several factors including a weak demand outlook for commodities caused by global economic uncertainty.  In addition, take-away pipeline capacity constraints exist in Western Canada and are not always able to meet the increased supply of oil resulting from the robust drilling activity of the past two years leading to widening price differentials.  For the twelve months to June 30, 2012, the West Texas Intermediate price for oil has decreased by about 10%, while over the same period the Nymex natural gas price has decreased by about 37%.The current uncertainty around the commodity price outlook has impacted WCSB drilling activity as certain E&P companies reduced their second half 2012 capital spending.  This trend is expected to continue to impact industry activity for the remainder of the year.  This is evident from such key industry indicators as drilling rig utilization, well licenses issued and well completions.  While drilling rig utilization was flat at 49% for the first six months of 2012 compared to the same period in 2011, well licenses issued have declined by 14% to 6,452 from 7,498 over the same periods.  Significantly, well completions decreased by 31% to 5,241 in the six months ended June 30, 2012 from 7,611 in the comparable 2011 period partly due to weather delays but also due to some reluctance by E&P companies to complete wells in an uncertain commodity price environment.  As a result, the very strong demand for pressure pumping services over the past two years has cooled during the second quarter as E&P companies re-evaluate drilling programs in light of weaker oil and natural gas liquids pricing in conjunction with the already low natural gas prices.  Horizontal well licenses as a percentage of total well licenses issued increased by 21% in the six months ended June 30, 2012 compared to the comparable 2011 period.  Horizontal wells drilled represented 65% of total wells drilled in the WCSB during the six months ended June 30, 2012, up from 51% in the comparable 2011 period.  Also, natural gas pricing has recently strengthened with NYMEX natural gas price exiting the second quarter at $2.90 US/mmbtu and remaining at around this level into July, up by about 20% from the Q2 2012 average of $2.35 US/mmbtu.In the current quarter, Canyon completed 251 jobs, a 58% increase over the 159 jobs completed in Q2 2011.  Consolidated revenues were $38 million in the current quarter, a 66% increase over $23 million in the prior year comparable quarter.  Even with higher revenues, the loss and comprehensive loss remained relatively flat at $6.9 million in Q2 2012 compared to a loss $6.6 million in Q2 2011, due to a higher fixed cost structure to support the Company's expanded equipment fleet, less profitable jobs resulting from modestly reduced pricing brought on by industry conditions and weather related drilling delays.  The loss per common share, fully diluted was $0.11 in Q2 2012 and in the prior year comparable quarter.For the six months ended June 30, 2012, Canyon completed 1,185 jobs, a 27% increase over the 934 jobs completed in the comparable 2011 period.  Consolidated revenues for the current six month period increased by 43% to $174 million from $122 million in the comparable 2011 period, resulting in average revenues per job of $150,746 in 2012 compared to $137,417 in the 2011 period.  Profit and comprehensive income was $30 million in the current period, a 28% increase over the $24 million earned in the comparable 2011 period.  Approximately 90% of Canyon's consolidated revenue is generated by its hydraulic fracturing division, with average fracturing revenue per job increasing by 12% to $227,313 in the six months ended June 30, 2012 from $203,113 in the comparable 2011 period. This increase was due to larger job sizes as the horizontal sections of wells lengthened resulting in a higher number of fracture sections per well and larger, high-rate treatments especially in plays such as the Duvernay.The rapid growth in Canyon's pumping capacity, from 25,500 HHP in late 2009 to 218,000 HHP as at June 30, 2012, and to in excess of 225,000 HHP by end of summer 2012, allows the Company to work on the deeper more complex areas of the WCSB and commit to customers with longer-term, equipment intensive projects.  All equipment added by Canyon since 2009 is heavy duty specification, suitable for deployment in the deep basin and in resource plays where pumping pressures, rates and durations have increased significantly.NON-GAAP MEASURESThe Company's Condensed Consolidated Interim Financial Statements have been prepared in accordance with International Accounting Standards (IAS) 34. Certain measures in this document do not have any standardized meaning as prescribed by International Financial Reporting Standards and are considered non-GAAP measures.EBITDA before share-based payments and funds from operations are not recognized measures under IFRS.  Management believes that in addition to profit and comprehensive income, EBITDA before share-based payments and funds from operations are useful supplemental measures as they provide an indication of the results generated by the Company's business activities prior to consideration of how those activities are financed, amortized or taxed, as well as the cash generated by the Company's business activities without consideration of the timing of the monetization of non-cash working capital items.  Readers should be cautioned, however, that EBITDA before share-based payments and funds from operations should not be construed as an alternative to profit and comprehensive income determined in accordance with IFRS as an indicator of the Company's performance.  Canyon's method of calculating EBITDA before share-based payments and funds from operations may differ from other companies and accordingly, EBITDA before share-based payments and funds from operations may not be comparable to measures used by other companies.  Canyon calculates EBITDA before share-based payments as profit and comprehensive income for the year adjusted for depreciation and amortization, equity settled share-based payment transactions, loss on sale of property and equipment, finance costs and income tax expense.  Reconciliations of these nON-GAAP measures to the most directly comparable IFRS measures are outlined below.In Q1 2011, Canyon described revenue less cost of services as Operating income.  In Q2 2011 and going forward, the Company describes revenue less cost of services as Gross profit.EBITDA before share-based payments        000's(Unaudited)  Three Months EndedJune 30 Six Months EndedJune 30 20122011 20122011Profit (loss) and comprehensive income (loss)($6,940)($6,639) $30,227$23,477Add (Deduct):     Depreciation and amortization7,0945,168 14,18010,013Finance costs23588 396168Share-based payment transactions(2,144)872 (1,202)2,790Cash settlement of deferred share units2,298- 2,298-Loss (gain) on sale of property and equipment3624 77(6)Income taxes(recovery)(2,131)(2,597) 10,4868,421EBITDA before share-based payments($1,552)($3,084) $56,462$44,863Funds from Operations      000's(Unaudited)Three Months EndedJune 30 Six Months EndedJune 30 20122011 20122011Net cash from operating activities$41,668$22,953 $45,687$44,463Add (Deduct):     Income Tax paid3,5164,061 23,06619,666Change in working capital(46,971)(30,187) (12,687)(19,434)Current tax4,5104,372 (6,760)(5,722)Funds from operations$2,723$1,199 $49,306$38,973Operating and Financial HighlightsThe operating and financial highlights for the six months ended June 30, 2012 are summarized as follows:Although industry activity is down year-over-year, Canyon continues to grow its market share in Canada.In Q2 2012, jobs completed and consolidated revenues increased by 58% and 66% to 251 and $37,974 respectively from 159 and $22,886 respectively in Q2 2011.For the six months ended June 30, 2012, jobs completed and consolidated revenues increased by 32% and 43% to 1,185 and $173,909 respectively from 895 and $121,923 respectively in the comparable 2011 period.In Q2 2012, revenues were impacted by modest price decreases as E&P companies adjusted capital programs in response to the current uncertain outlook for oil and natural gas liquids prices.  With approximately 90% of consolidated revenues derived from hydraulic fracturing services, the average fracturing revenue per job decreased to $212,281 in Q2 2012 from $245,778 in Q2 2011.  This decrease is attributable both to price pressure and job mix.  For the six months ended June 30, 2012, average fracturing revenue per job increased by 14% to $227,313 from $203,113 in the comparable 2011 period.  In this instance, the completion of larger jobs in Q1 offset the Q2 price reductions to result in the higher average fracturing revenue per job.For the six months ended June 30, 2012, EBITDA before share-based payments expense (see NON-GAAP MEASURES) increased by 26% to $56,462 from $44,863 in the comparable 2011.Funds from operations (see NON-GAAP MEASURES) increased to $2,723 in Q2 2012 from $1,199 in Q2 2011.  For the six months ended June 30, 2012, funds from operations (see NON-GAAP MEASURES) increased by 27% to $49,306 from $38,973 in the comparable 2011 period.Even with higher revenues in the current quarter, the loss and comprehensive loss remained flat at $6,940 (loss of $0.11 per share, diluted) in Q2 2012 compared to $6,639 (loss of $0.11 per share, diluted) in Q2 2011.  Offsetting the higher revenues were lower field margins due to pricing, higher depreciation and amortization expense and an increase in fixed costs to support the Company's expanded equipment fleet.For the six months ended June 30, 2012, the profit and comprehensive income increased by 28% to $30,227 ($0.48 per share, diluted) from $23,477 ($0.37 per share, diluted) in the comparable 2011 period.Canyon's equipment fleet exited Q2 2012 with 218,000 HHP and will reach 225,500 HHP by end of summer 2012 following completion of the 2012 capital program announced in May 2011.In May, Canyon renewed its bank credit facilities extending the term by a further year to May 31, 2015.Canyon remains in a very strong financial position with available cash of $23 million in addition to available undrawn credit facilities of $60 million and working capital of $43 million, including cash, as at June 30, 2012.On June 19, 2012, Canyon declared a quarterly dividend of $0.15 per common share, or $9.2 million, which was paid to shareholders on July 26, 2012.QUARTERLY COMPARATIVE STATEMENTS OF OPERATIONS    000's except per share amounts(Unaudited)Three Months Ended June 30 2012 2011Revenues$37,974 $22,886Cost of services(42,534) (27,506)Gross profit (loss)(4,560) (4,620)Administrative expenses(4,276) (4,528)Results from operating activities(8,836) (9,148)Finance costs(235) (88)Profit (loss) before income tax(9,071) (9,236)Income tax (expense) recovery2,131 2,597Profit (loss)and comprehensive income (loss)($6,940) ($6,639)EBITDA before share-based payments(1)($1,552) ($3,084)Earnings (loss) per share:    Basic($0.11) ($0.11) Diluted($0.11) ($0.11)Note (1): See Non-GAAP Measures.RevenuesIn Q2 2012, revenues increased 66% to $37,974 from $22,886 in Q2 2011, while jobs completed increased 58% to 251 from 159 over the same quarters.  Approximately 90% of Q2 2012 consolidated revenues were provided by hydraulic fracturing services with average fracturing revenue per job decreasing to $212,281 from $245,778 in Q2 2011.  The decrease in average fracturing revenue per job is due to both the completion of larger jobs and to pricing pressure resulting from E&P companies reducing capital programs in response to the current uncertain outlook for commodity prices.  In Q2 2012, Canyon's average consolidated revenue per job increased by 10% to $162,034 from $147,078 in Q2 2011.Cost of servicesCost of services for the three months ended June 30, 2012 totaled $42,534 (2011: $27,506) and includes materials, products, transportation and repair costs of $23,544 (2011: $13,640), employee benefits expense of $12,202 (2011: $8,972), and depreciation of property and equipment of $6,788 (2011: $4,894).The increase in materials, products, transportation and repair costs is due to the increase in Canyon's business activities.  The increase in employee benefits expense is due to the additional staff for Canyon's expanded equipment fleet.  The increase in depreciation of property and equipment is due to additional depreciation pertaining to equipment additions.Administrative expensesAdministrative expenses for the three months ended June 30, 2012 totaled $4,276 compared to $4,528 in Q2 2011 with an increase in employee benefits expense to $2,086 in Q2 2012 from $1,637 in Q2 2011 being offset by a decrease in share-based payments expense to $154 in Q2 2012 from $872 in Q2 2011.  The increase in employee benefits expense is due to Canyon adding management and administrative staff to support its increased business activities.  Share-based payments expense includes a payment pursuant to the exercise of 200,000 deferred share units at an exercise price of $1.25 per unit, less a reduction in share-based payments expense due to fluctuations in the price of the Company's common shares.  Administrative expenses also include depreciation of buildings and office equipment and amortization of intangibles of $308 (2011: $273).  In addition, other administrative expenses totaled $1,730 in Q2 2012 compared to $1,746 in Q1 2011.Share-based payments expense represents the value assigned to the granting of options and incentive-based units under the Company's Share Purchase Option Plan and Stock Based Compensation Plan respectively, using the Black-Scholes model.  For Q2 2012, $0.9 million (Q2 2011 - $0.6 million) was charged to expenses and included in contributed surplus in respect of these two plans.  In addition, obligations for payments under the Company's Deferred Share Unit Plan are accrued as share-based payments expense over the vesting period.   The accrued liability increases or decreases with fluctuations in the price of the Company's common shares, with a corresponding increase or decrease in the share-based payments expense.  In Q2 2012, share-based payments expense was reduced by $0.7 million (Q2 2011 - $0.3 million) for the Company's Deferred Share Unit Plan to reflect the payment pursuant to the exercise of 200,000 units and changes in the price of the common shares of the Company.EBITDA before share-based payments (See Non-GAAP Measures)In Q2 2012, EBITDA before share-based payments (see NON-GAAP MEASURES) improved to negative $1,552 compared to negative $3,084 in the comparable 2011 quarter.  The higher fixed costs to support the Company's increased equipment fleet and business activities resulted in the negative EBITDA even though revenues were higher.Finance costsFinance costs include interest on finance lease obligations and automobile loans and totaled $235 in Q2 2012 (Q2 2011: $88).  The increase in finance costs is due to additional finance leases for automotive equipment to support Canyon's increased business activities and expenses relating to renewal of the bank credit facilities.Income Tax ExpenseAt the expected combined income tax rate of 25%, the loss before income tax for Q2 2012 of $9,071 would have resulted in an expected recovery of $2,268, compared to the actual income tax recovery of $2,131.Profit and comprehensive income and earnings per shareLoss and comprehensive loss totaled $6,940 in Q2 2012 compared to $6,639 in Q2 2011.Basic and diluted loss per share was $0.11 in each of Q2 2012 and Q2 2011.SIX MONTHS TO JUNE 30, 2012 COMPARATIVE STATEMENTS OF OPERATIONS    000's except per share amounts(Unaudited)Six Months Ended June 30 2012 2011Revenues      $173,909 $121,923Cost of services      (122,988) (79,939)Gross profit      50,921 41,984Administrative expenses      (9,812) (9,918)Results from operating activities      41,109 32,066Finance costs      (396) (168)Profit before income tax      40,713 31,898Income tax expense      (10,486) (8,421)Profit and comprehensive income      $30,227 $23,477EBITDA before share-based payments(1)      $56,462 $44,863Earnings per share:    Basic      $0.49 $0.39 Diluted      $0.48 $0.37Note (1): See Non-GAAP Measures.RevenuesConsolidated revenues increased by 43% to $173,909 in the six months ended June 30, 2012 from $121,923 in the comparable 2011 period, while jobs completed increased 32% to 1,185 from 934 over the same periods.  Approximately 90% of the current period's consolidated revenues were provided by hydraulic fracturing services with average fracturing revenue per job increasing 12% to $227,313 from $203,113 in the six months to June 30, 2011.  Canyon's average consolidated revenue per job in the six months ended June 30, 2012 increased 10% to $150,746 from $137,417 in Q1 2011.Cost of servicesCost of services for the six months ended June 30, 2012 totaled $122,988 (2011: $79,939) and includes materials, products, transportation and repair costs of $77,143 (2011: $47,881), employee benefits expense of $32,269 (2011: $22,573), and depreciation of property and equipment of $13,576 (2011: $9,485).The increase in materials, products, transportation and repair costs is due to the increase in Canyon's business activities.  The increase in employee benefits expense is due to the additional staff for Canyon's expanded equipment fleet.  The increase in depreciation of property and equipment is due to additional depreciation pertaining to equipment additions.Administrative expensesAdministrative expenses for the six months ended June 30, 2012 totaled $9,812 (2011: $9,918) with an increase in employee benefits expense to $5,070 (2011: $3,378) being offset by a decrease in share-based payments expense to $1,096 (2011: $2,790).  The increase in employee benefits expense is due to Canyon adding management and administrative staff to support its increased business activities.  Share-based payments expense includes a payment pursuant to the exercise of 200,000 deferred share units at an exercise price of $1.25 per unit, less a reduction in share-based payments expense due to fluctuations in the price of the Company's common shares.  Administrative expenses also include depreciation of buildings and office equipment and amortization of intangibles of $605 (2011: $528).  In addition, other administrative expenses totaled $3,041 (2011: $3,222).Share-based payments expense represents the value assigned to the granting of options and incentive-based units under the Company's Share Purchase Option Plan and Stock Based Compensation Plan respectively, using the Black-Scholes model.  For the six months ended June 30, 2012, $1.7 million (2011 - $1.1 million) was charged to expenses and included in contributed surplus in respect of these two plans.  In addition, obligations for payments under the Company's Deferred Share Unit Plan are accrued as share-based payments expense over the vesting period.  The accrued liability increases or decreases with fluctuations in the price of the Company's common shares, with a corresponding increase or decrease in the share-based payments expense.  In the six months ended June 30, 2012, share-based payments expense was reduced by $0.6 million (2011 - $1.7 million) for the Company's Deferred Share Unit Plan to reflect the payment pursuant to the exercise of 200,000 units and changes in the price of the common shares of the CompanyEBITDA before share-based payments (See Non-GAAP Measures)For the six months ended June 30, 2012, EBITDA before share-based payments (see NON-GAAP MEASURES) increased 26% to $56,462 (2011: $44,863) due to increased business with Canyon's expanded equipment fleet supported by strong market conditions across the industry.Finance costsFinance costs include interest on finance lease obligations and automobile loans and totaled $396 (2011: $168).  The increase in finance costs is due to additional finance leases for automotive equipment to support Canyon's increased business activities.Income Tax ExpenseAt the expected combined income tax rate of 25%, the profit before income tax for the six months ended June 30, 2012 of $40,713 results in an expected income tax expense of $10,178 compared to the actual income tax expense of $10,486.  The actual income tax expense was increased by non-deductible expenses.Profit and comprehensive income and earnings per shareProfit and comprehensive income increased 29% to $30,227 for the six months ended June 30, 2012, from $23,477 in the comparable 2011 period as Canyon's expanded equipment fleet completed an increased number of jobs.Basic and diluted earnings per share were $0.49 and $0.48, respectively earned in the six months ended June 30 2012 compared to basic and diluted earnings per share of $0.39 and $0.37, respectively earned in the comparable 2011 period.FORWARD-LOOKING STATEMENTSThis document contains certain forward-looking information and statements within the meaning of applicable securities laws.  The use of any of the words "expect", "anticipate", "continue", "estimate", "guidance", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "budget", "strategy" and similar expressions are intended to identify forward-looking information or statements.  In particular, but without limiting the foregoing, this document contains forward-looking information and statements pertaining to the following: future oil and natural gas prices; future results from operations; future liquidity and financial capacity and financial resources; future costs, expenses and royalty rates; future interest costs; future capital expenditures; future capital structure and expansion; the making and timing of future regulatory filings; and the Company's ongoing relationship with major customers.The forward-looking information and statements contained in this document reflect several material factors and expectations and assumptions of the Company including, without limitation: that the Company will continue to conduct its operations in a manner consistent with past operations; the general continuance of current or, where applicable, assumed industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; certain commodity price and other cost assumptions; the continued availability of adequate debt and/or equity financing and cash flow to funds its capital and operating requirements as needed; and the extent of its liabilities.  The Company believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct.The forward-looking information and statements included in this document are not guarantees of future performance and should not be unduly relied upon.  Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of the Company's services; unanticipated operating results; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in the development plans of third parties; increased debt levels or debt service requirements; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; reliance on industry partners; attracting and retaining skilled personnel and certain other risks detailed from time to time in the Company's public disclosure documents (including, without limitation, those risks identified in this document and the Company's Annual Information Form).The forward-looking information and statements contained in this document speak only as of the date of the document, and none of the Company or its subsidiaries assumes any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.SOURCE: Canyon Services Group Inc.For further information: Brad Fedora President and CEO Canyon Services Group Inc. 2900 Bow Valley Square III  255 - 5 Avenue SW  Calgary, Alberta, T2P 3G6  Phone:  403-290-2491  Fax: 403-355-2211 Or Barry O'Brien Vice President, Finance and CFO Canyon Services Group Inc. 2900 Bow Valley Square III 255 - 5 Avenue SW Calgary, Alberta, T2P 3G6 Phone:  403-290-2478 Fax: 403-355-2211