EPiC Energy Resources Announces First Quarter Results

HOUSTON, May 20 /PRNewswire-FirstCall/ -- EPiC Energy Resources, Inc.
(OTC Bulletin Board: EPCC) ("EPiC") a provider of engineering & consulting
services to the energy industry, today announced its 2008 first quarter
results. Since its inception, EPiC has been acquisition-focused, and in
August 2007 acquired The Carnrite Group, LLC ("Carnrite"), a management
consulting company focused on providing strategic and operational consulting
services to the broad energy industry and in December 2007, acquired Pearl
Investment Company ("Pearl"), a diversified engineering and energy services
company.
First Quarter Highlights:
-- On February 20, 2008, EPiC completed the acquisition of a global
training company called Epic Integrated Solutions, LLC ("EIS") in a
stock and cash transaction valued at $3.1 million. The acquisition is
anticipated to be accretive to earnings in 2008. During the twelve
months ending 2007, EIS generated approximately $2.9 million in revenue
with net income of $699,000.
-- As of April 30, 2008, Epic's backlog for engineering and consulting
services to be provided in the future was approximately $43.5 million
compared with a backlog of approximately $23.9 million as of
February 29, 2008.

First Quarter Results:
During the first quarter ending March 31, 2008, EPiC generated total
revenues of $17.5 million and a net loss of $1.3 million, or $0.03 per share,
compared to fourth quarter 2007 revenue of $6.8 million and a net loss of $2.1
million, or $0.11 per diluted share. The growth in revenue was due to the
acquisitions of Pearl, which was completed on December 5, 2007, and EIS, which
closed on February 20, 2008. Contributing to the net loss in the 2008 period
were unexpected additional expenses recorded for a fixed fee contract, one
time costs associated with the Pearl and EIS acquisitions, and a general
increase in costs to facilitate the integration of Carnrite, Pearl, and EIS.
The first quarter 2008 results included non-cash expenses of $1.5 million
and other one-time expenses of $718,000. Excluding these items, 2008 first
quarter net income would have been $945,000 or $0.02 per diluted share. Net
cash flows provided by operating activities for the three months ended March
31, 2008 was $3.7 million and income from operations was $113,000.
Prior to the aforementioned acquisitions, in the first quarter 2007 EPiC
generated revenue of $76,000 and a net loss of $452,000, or $0.01 per share.
Basic and fully-diluted weighted average shares of common stock outstanding in
the first quarter of 2008 decreased 18% to 43.3 million shares from 52.7
million shares in the first quarter of 2007, primarily due to the surrender of
23.2 million shares of common stock in March 2007 by certain senior company
officers.
"We continue to integrate and grow our organization as exemplified by the
sequential increase in revenue we generated during the first quarter compared
to the fourth quarter of 2007," said Rex P. Doyle, EPiC's Chief Executive
Officer. "Our Engineering and Consulting business unit turned-in strong
revenue and operating profit in a quarter that had all the possible
distraction from integration and consolidation activities. We are excited that
our backlog for engineering and consulting services continues to rise,
reflecting not only the strength of the industry, but also our expanding
blueprint of best-in-class service offerings. We recognize that the
integration of three acquisitions along with a substantial fixed fee contract
signed in early 2007 have negatively impacted our first quarter results,
however, we are aggressively pursuing expense controls, and addressing project
management and project control processes. We continue to explore
opportunities to further develop our relationships with our customers and to
make progress on cross selling our consulting services."
Segment Information

Segment Reporting
Q1 2008
Engineering Oil and Gas
Consulting Production* Totals
(unaudited) (unaudited) (unaudited)
Revenue $17,473,868 $- $17,473,868
Operating Expense 15,756,146 1,604,612 17,360,758
Operating Income 1,717,722 (1,604,612) 113,110
Other Inc/Exp 110,764 1,264,468 1,375,232
Net Income $1,606,958 $(2,869,080) $(1,262,122)

* The oil and gas operating expenses include general and administrative,
compensation, occupancy, professional services and communication
expenses related to Epic headquarters.

Engineering Consulting Segment
The engineering and consulting segment is made up of the contributions
from Carnrite, Pearl and EIS, which was acquired on February 20, 2008. This
segment generated revenue of $17.5 million, which included $11.0 million in
revenue from consulting fees and $6.5 million of reimbursed expenses. Segment
operating profit of $1.7 million, included a net contribution from reimbursed
expenses of approximately $672,000 in the first quarter of 2008. Segment
operating margins were 9.2% in the first quarter.
The operating income for this segment was less than expected due to a
slower start than anticipated for engineering and operations contracts in the
Rockies area primarily related to adverse weather conditions early in the
quarter and a general delay in customers' project schedules. A second,
significant negative impact was due to substantial cost overruns on a fixed
fee project initiated in the first quarter of 2007 and scheduled to be
complete by the end of 2007. Due to scope changes and execution issues,
approximately 12,000 additional, unbilled man-hours have been spent in the
first four months of 2008 in an attempt to complete this project. It is
expected that the majority of the costs related to this project have been
expended.
Oil and Gas Production Segment
During the first quarter of 2008, production from our oil and gas
properties in Kansas and Oklahoma remained shut-in. However, gas production
from our Kansas wells is expected to resume early in the second half of 2008
upon the completion of Nitrogen Rejection Units (NRU) to harvest the helium
from the field. The property in Kansas contains helium reserves estimated at
between 1% and 2% of the proved gas reserves of the property. A third party
has been contracted to build, install and operate the NRU. Capital costs to
build, install and operate the NRU units will be the responsibility of the
third party company in exchange for a percentage of the produced natural gas
and helium.
Epic is currently looking at strategic alternatives for the properties
owned in both Kansas and Oklahoma.
About EPiC
EPiC Energy Resources is an integrated energy company based in The
Woodlands, Texas. EPiC is focused on providing both energy engineering &
consulting services along with acquiring, developing and optimizing energy
assets. EPiC is headquartered at 10655 Six Pines Drive, Suite 210, The
Woodlands, Texas 77380. Office -- 281-419-3742, http://www.1epic.com.
Forward Looking Statements
Certain statements included in this release constitute forward-looking
statements. These forward-looking statements are based on management's belief
and assumptions derived from currently available information. Although EPiC
Energy Resources ("EPiC") believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Actual results could differ materially
from forward-looking statements expressed or implied herein as a result of a
variety of factors including, but not limited to: a decline in the price of,
or demand for, oil and gas, demand for EPiC's services, loss or unavailability
of key personnel, inability to recruit or retain personnel, competition for
customers and contracts, various potential losses associated with fixed-price
contracts, general economic conditions; and other financial, operational and
legal risks and uncertainties detailed from time to time in EPiC's SEC
filings. EPiC does not undertake any obligation to publicly update forward
looking statements contained herein to reflect subsequent events or
circumstances.
-Tables to Follow-

EPIC ENERGY RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three Months Ended March 31,
2008 2007
REVENUES
Consulting fees $11,006,850 $74,842
Reimbursed expenses 6,467,018 -
Oil and gas revenue - 742
TOTAL REVENUES 17,473,868 75,584

OPERATING EXPENSES
General and administrative 2,849,465 427,642
Lease operating expenses 60,206 64,303
Professional and subcontracted
services 1,706,905 -
Compensation and benefits 6,122,179 -
Reimbursed expenses 5,795,394 -
Occupancy, communication and other 346,608 -
Depreciation, depletion and
amortization 467,852 -
Accretion expense 2,151 5,369
OPERATING EXPENSES 17,360,760 497,314

INCOME (LOSS) FROM OPERATIONS 113,108 (421,730)
OTHER INCOME (EXPENSE)
Interest and other income 24,740 2,103
Interest expense (1,399,972) (32,077)
OTHER INCOME (EXPENSE) (1,375,232) (29,974)

NET LOSS $(1,262,124) $(451,704)

LOSS PER COMMON SHARE - Basic and Diluted $(.03) $(.01)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
- Basic and Diluted 43,323,536 52,659,835

EPIC ENERGY RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS

March 31, December 31,
ASSETS 2008 2007
(unaudited) (audited)
CURRENT ASSETS
Cash and cash equivalents $4,671,592 $3,483,179
Restricted cash 2,400,000 3,400,003
Accounts receivable:
Billed, net of allowance of
$636,000 8,700,949 11,334,690
Unbilled, at estimated net
realizable value 5,818,850 3,446,757
Accounts receivable - other 5,000 639,500
Prepaid expenses and other 212,589 309,081
TOTAL CURRENT ASSETS 21,808,980 22,613,210
Oil and gas properties (full cost
method), net of accumulated
impairments and depletion of $5,259,845
and $3,093,079, respectively:
Proved 5,247,746 5,247,746
Unproved - -
Other mineral reserves 783,474 783,474
Property and equipment, net of
accumulated depreciation of $555,461
and $112,119, respectively 10,843,569 10,596,463
Other assets 219,410 209,213
Debt issuance costs, net of accumulated
amortization of $146,914 and $28,650,
respectively 1,882,141 1,690,350
Goodwill and intangible assets, net of
accumulated amortization of $29,412
and $4,902, respectively 36,347,394 33,609,064
TOTAL ASSETS 77,132,714 $74,749,520
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $3,969,972 $4,066,368
Bank overdrafts 626,848 3,441,949
Accrued liabilities 4,101,886 2,949,270
Customer deposits 3,083,781 1,357,862
Current portion of long term debt 5,025,944 3,208,135
TOTAL CURRENT LIABILITIES 16,808,431 15,023,584
Asset retirement obligations 134,777 132,626
Long-term debt, net of current portion
and debt discount of $12,225,626
and $12,878,572, respectively 14,168,722 13,928,954
TOTAL LIABILITIES 31,111,930 29,085,164
STOCKHOLDERS' EQUITY
Common stock, no par value:
100,000,000 authorized; 43,883,921
and 42,948,921 shares issued and
outstanding at March 31, 2008 and
December 31, 2007, respectively 42,007,303 40,698,806
Additional paid-in capital 13,726,847 13,416,792
Accumulated deficit (9,713,366) (8,451,242)
TOTAL STOCKHOLDERS' EQUITY 46,020,784 45,664,356
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $77,132,714 $74,749,520

EPIC ENERGY RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Three Months Ended March 31,
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,262,124) $(451,704)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation, depletion and amortization 467,852 -
Amortization of debt issuance costs 118,264 -
Accretion expense 2,151 5,369
Shares issued for compensation 258,497 113,676
Amortization of debt discount 652,946 -
Changes in operating assets and liabilities:
Accounts receivable 513,757 (66,336)
Prepaid expenses and other 272,297 32,462
Accounts payable (169,134) (70,670)
Accrued liabilities 2,873,942 86,813
Net cash provided by (used in)
operating activities 3,728,448 (350,390)
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in restricted cash 1,000,003 -
Acquisition of property and equipment (572,795) -
Acquisition of EIS, net of cash received 35,037 -
Increase in other assets (191,810) -
Net cash provided by investing
activities 270,435 -
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdrafts (2,815,101) -
Payments on debt (332,310) (42,184)
Proceeds from debt 336,941 -
Net proceeds from issuance of common stock - 454,000
Net cash provided by (used in)
financing activities (2,810,470) 411,816
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,188,413 61,426
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 3,483,179 590,172
CASH AND CASH EQUIVALENTS, END OF PERIOD 4,671,592 $651,598
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $628,762 $-
NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Insurance policies acquired with debt $- $25,992
Note payable for oil and gas
properties $71,002 $57,462
Acquisition of EIS with stock $1,050,000 $-

CONTACTS:
Rex P. Doyle, Chief Executive Officer
281-419-3742 / rdoyle@1epic.com

Lisa Elliott, Sr. Vice President
DRG&E - IR Counsel
713-529-6600 / lelliott@drg-e.com

SOURCE EPiC Energy Resources, Inc.

Rex P. Doyle, Chief Executive Officer of EPiC Energy Resources, Inc.,
+1-281-419-3742, rdoyle@1epic.com; or Lisa Elliott, Sr. Vice President of
DRG&E - IR Counsel, +1-713-529-6600, lelliott@drg-e.com, for EPiC Energy
Resources, Inc.