/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
Symbol: SUT: TSX Venture Exchange
CALGARY, May 2 /CNW/ - Although substantial rainfall in September 2006 and reduced drilling activity during the year resulted in lower waste water treatment activity, Suntec experienced demand for methanol water sales and water recycling. During the fourth quarter of 2006, energy producers undertook modest drilling as a result of low natural gas prices in the second and third quarter of 2006.
Financial Summary
Year ended December 31
2006 2005
---- ----
($) ($)
Revenue 264,094 200,158
Operating expenses 1,066,937 730,387
Loss before the following (802,843) (530,229)
Write-down of assets 1,214,536 -
Loss on sale of assets 30,058 -
Net loss (2,047,437) (530,229)
Loss per share, basic and diluted (0.07) (0.03)
Private Placement
On April 30, 2007, the Corporation closed a private placement of $205,000 of promissory notes. The promissory notes bear interest at the Royal Bank of Canada's prime rate, are unsecured, and are due upon demand. Directors and an officer of the Corporation subscribed for $165,000 of the private placement.
Outlook
Fracture stimulation activity is anticipated to increase in 2007 as operators develop shallow gas plays due to higher anticipated gas prices than 2006. The increase was modest in the first quarter, with a significant increase in the latter half of 2007.
The approval of the AEUB downspacing initiative in July 2006 to four wells per section for the southeastern quadrant of Alberta area is also anticipated to result in increased fracture stimulations. Increased demand for Suntec's existing services, combined with the Facility expansion and introduction of sand handling and expanded potassium chloride production capacity, are expected to lead to increased revenue in 2007.
Suntec's Financial Statements and Management Discussion and Analysis for the year ended December 31, 2006 can be found on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com.
About Suntec
Suntec Pure Water Technologies Inc. treats and recycles oilfield waste water and sells recycled water, methanol water and potassium chloride. Waste water and sand is transported by truck from well fracturing operations to Suntec's oilfield waste water treatment facility, located approximately 80 kilometers southeast of Calgary, Alberta. The recycling process removes residual contaminants from the water. Treated and recycled water, methanol water and potassium chloride are sold to oil and gas industry operators for re-use in the oil and gas drilling and development process while the sand is shipped to a recycler. The waste water, as treated and recycled by Suntec, would otherwise be disposed of through the existing method of deep well injection, removing the water from the hydrological cycle.
Suntec's common shares trade on the TSX Venture Exchange under the symbol "SUT".
This release includes forward-looking statements and potential future circumstances and developments. Forward-looking statements regarding future performance are subject to risks and uncertainties and actual results may differ materially.