CALGARY, Feb. 26 /CNW/ - Canyon Services Group Inc. today announced its fourth quarter and annual 2008 results. The following should be read in conjunction with the Management's Discussion and Analysis, the consolidated financial statements and notes of Canyon Services Group Inc. which are available on SEDAR at www.sedar.com.

OVERVIEW OF THE FOURTH QUARTER AND YEAR 2008

Canyon has defied the trends of the industry and has increased revenues and cash flows significantly in the past 18 months. Since mid-2006, the Western Canadian well stimulation services industry has experienced a slow down as lower natural gas prices reduced E&P companies' drilling activities. More recently, since summer 2008, oil and natural gas prices have declined further amid global financial market crisis. Nevertheless, during these periods of reduced activity across the well stimulation services industry, Canyon has dramatically grown in both market share and revenues, attributable to new fracturing methods, including the patented Grand Canyon process, a re-vamped sales team, a modern and technologically-advanced equipment fleet and new operating bases in Grande Prairie and Medicine Hat.

The operating and financial highlights for the fourth quarter and year ended December 31, 2008 may be summarized as follows:

Operating and Financial Highlights
-   In Q4 2008, revenues and jobs reached record levels, increasing by
    47% to $29.0 million and by 55% to 611 respectively, compared to Q4
    2007.  Q4 2008 revenues were 40% higher than the previous quarterly
    record achieved in Q3 2008.
-   For the 2008 year, Canyon's job count almost doubled to 1,724 from
    922 in 2007, while revenues increased by 51% to $72.4 million from
    $48.1 million in the prior year.  Revenues were not proportionate to
    the increase in jobs due a different job mix in 2008 and due to price
    pressure that commenced in late 2006, the effect of lower demand by
    E&P companies for well stimulation services in response to lower
    natural gas prices.
-   Canyon completed its third major shallow gas project with its Grand
    Canyon technology.  In Q3 and Q4 2008, 165 wells were fractured using
    our fluid free, light weight proppant technology.  Based on the
    production uplift and completion cost savings of this technology, our
    customer (an intermediate sized operator) has awarded an additional
    project for the adjacent area estimated to commence in mid-2009.
-   In Q4 2008, Canyon generated EBITDA before stock based compensation
    expense (see Non-GAAP Measures) of $7.6 million compared to $3.3
    million in the prior year's quarter.
-   As at December 31, 2008, the Company's available credit facilities
    total $18.1 million.
-   For the 2008 year, EBITDA before stock based compensation expense was
    $9.8 million, a significant increase over the $0.6 million recorded
    in 2007.
-   In Q4 2008, Canyon generated income before income taxes of
    $4.3 million, a significant improvement over the income before income
    taxes of $198 thousand in Q4 2007.  For the year ended December 31,
    2008, the loss before income taxes was $2.4 million, compared to the
    loss before income taxes of $11.9 million in 2007.
-   An expanded market share resulted in significantly increased job
    counts across all divisions, with the Conventional Fracturing
    Division accounting for a significant proportion of the increase.
-   In June 2008, Canyon commenced remedial cementing, thereby increasing
    the utilization of equipment in the Chemical Stimulation and Remedial
    Services Division. In Q4 2008, this division completed 115 jobs.
-   A new operating base was opened in Medicine Hat allowing Canyon to
    better service customers with operations in Southeast Alberta and
    Southeast Saskatchewan.
-   In June 2008, Canyon completed a reorganization of its debt
    facilities by replacing a portion of its short-term debt with a long-
    term facility, resulting in an estimated annual reduction of
    $2.1 million in debt service costs (loan principal and interest) and
    an increase in available credit to fund operating activities.
-   Canyon added to its CO2 transportation and infrastructure in Q3 and
    Q4 2008 resulting in $3.8 million of capital expenditures.