Science & Technology
Science and Technology
Science and Technology
Thu, May 20, 2010 
LEAGUE CITY, TX--(Marketwire - May 20, 2010) - ERF Wireless (
Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "During the first quarter of 2010 our Oil and Gas Division, providing broadband services to the energy industry, reported increased operating results. This can be attributed to our previous efforts invested to date in laying the foundation for future growth by acquiring additional Wireless Internet Service Provider (WISP) operations and partnering with other large wireless network operators to expand our footprint in active oil and gas drilling regions in preparation for the recovery of the oil and gas industry that we were certain would occur. Oil and gas wireless broadband services contributed $172,000 during the first quarter ended March 31, 2010, as compared to $10,000 for the first quarter of 2009. For additional comparison purposes, oil and gas wireless broadband services contributed a total of $72,000 in calendar year 2008 and $308,000 in calendar year 2009."
For the first quarter of 2010, the company reported total net sales of $1,479,000, an increase of 12% compared with $1,323,000 for the first quarter of 2009. The $156,000 increase in net sales during the first quarter of 2010 as compared to the net sales generated in the first quarter of 2009 is primarily attributable to a $299,000 increase in recurring WISP services from acquisitions and oil and gas deployments of our Mobile Broadband Trailers (MBTs), partially offset by a $38,000 decline in wireless paging service and infrastructure construction revenues and a $105,000 decline in banking network installation and services revenues. For the quarter ended March 31, 2010, the company reported losses from operations of $1,826,000 compared to losses from operations of $2,072,000 for the quarter ended March 31, 2009. For the quarters ended March 31, 2010 and 2009, cash used for operating activities was $574,000 and $434,000, respectively. Primary and fully-diluted net loss per share for the quarter ended March 31, 2010, was ($0.01). Primary and fully-diluted net loss per share for the quarter ended March 31, 2009, was ($0.02).
RECENT EVENTS
Historically, our revenues have been generated primarily from Internet and construction services. Our Internet revenues result from our offering of broadband and basic communications services to residential and enterprise customers. Our construction revenues result from the construction of bank networks and other services associated with providing wireless products and services to the regional banking industry. During the first quarter of 2010, approximately 95% of our revenue was generated from Internet services and 4% of our revenue was generated from construction services. We expect our Internet services to experience the most growth during the fiscal year 2010 as we devote significant capital resources to developing the sale of wireless products and services in the oil and gas market.
During the first quarter of fiscal 2010, the company advanced its strategic business plan as evidenced by a number of agreements and activities. A summary of milestones during and subsequent to the year ended March 31, 2010, includes:
The Company's Wireless Bundled Services division experienced a $299,000 or 27% increase in revenues in the first quarter ended March 31, 2010, as compared to the same quarter a year ago. Oil and Gas wireless broadband services contributed $172,000 during the first quarter ended March 31, 2010, as compared to $3,700 for the first quarter of 2009.
Following the completion of a BranchNet encrypted enterprise-class wireless banking network for West Texas State Bank, located in the oil and gas rich Permian Basin which includes the Midland and Odessa, Texas, markets, the Company initiated a WiNet marketing campaign and began reselling digital oilfield solutions off of this network to its oil and gas customers in this region. The network is comprised of FCC-licensed frequencies creating a 165-Mbps backbone, delivering speeds in excess of 40-Mbps to each branch bank location. The WiNet contract is expected to generate more than $6 million in recurring revenues over the next ten years after a two-year ramp-up period. The bank will receive a percentage of the gross subscriber revenues as part of the agreement.
The announcement of the immediate start of design, development and construction of a new wireless network in the oil and gas rich Haynesville Shale in northwestern Louisiana and northeastern Texas, covering hundreds of natural gas drilling rigs in one of the fastest growing gas shale developments in North America.
The submittal of second-round applications for approximately $42 million of broadband stimulus funding in a two-state region under the Broadband Initiatives Program ("BIP") for Louisiana and parts of East, Central and South Texas.
The Company announced that they have begun taking delivery of the initial shipments from the recently announced $4.7 million order of Mobile Broadband Trailers (MBTs) that will expedite the deployment of the company's high-speed wireless broadband digital oilfield solutions for oil and gas drilling operations throughout North America.
The Company has recently completed the initial deployments of part of its MBT fleet in support of oil and gas customer requirements for well workovers on certain existing oil and gas wells and for new well completions. Referred sometimes as "fracture stimulation" or "FRAC" jobs for existing mature wells, they require the same level of communications as existing new drilling operations. There are hundreds of thousands of existing wells throughout North America and ERF Wireless has already received substantial commitments for 2010 from its oil and gas customers for this new area of wireless business.
The Company announced that its Oil & Gas Services Division has recently completed the initial installations of its wireless broadband services to its first customer in the Horn River Basin of the Canadian Province of British Columbia. While ERF Wireless has previously reported that it has wireless broadband capabilities throughout much of the Canadian Province of Alberta through a Master Service Agreement with a Canadian public company, this is the first reported service entry into British Columbia and the first report of the deployment of its wireless broadband services in Canada.
The Company announced that, because of the broad scope of oil and gas wireless communications products and services it is now providing, it has agreed with its exclusive resale marketing partner that it will also be allowed to market directly to the end customer as well as jointly under the existing resale contract to increase the overall combined scope of the marketing effort to the oil and gas industry. The details of this additional marketing thrust, as well as other modifications and clarifications, are intended to be defined in the near future in an addendum to the existing exclusive resale contract.
The Company announced that, as part of its initial independent marketing thrust under its modified exclusive contract with the world's largest oil and gas services company, its Oil & Gas Services Division exhibited and demonstrated the company's reliable, high-speed, wireless broadband communications system at a number of industry trade shows, including at the 2010 Offshore Technology Conference (OTC) recently held in Houston May 3-6. The ERF Wireless system dramatically reduces operating expenses for its oil and gas customers by streaming critical data from remote drilling, completion and production oil and gas sites to corporate offices for rapid analysis and decision making.
The Company announced that its Oil & Gas Services Division has recently taken delivery of the first unit in a family of new mobile broadband trailers that are proprietary to ERF Wireless and that are equipped with 100-foot deployable towers. These giant mobile broadband towers (MBTs) are unique to the industry as compared to the more common 50-foot MBTs currently being used across most ERF Wireless networks. These new 100-foot MBTs were specifically designed and developed for the tall forested regions of certain of the oil and gas drilling regions where even VSAT communications with much lower bandwidth have trouble transmitting beyond the 80- to 90-foot tree canopy surrounding the drilling rigs. In particular, new ERF Wireless network coverage initiatives into areas such as recently announced in the Haynesville Shale region would not be possible without this new 100-foot MBT.
The Company announced that its ERF Enterprise Network Services subsidiary (ENS) has finished deploying a BranchNet™ and BankNet™ encrypted enterprise-class wireless banking network for First Federal Bank of Louisiana that spans almost the entire western region of Louisiana from Lake Charles in the south to Natchitoches in the north. This network provides more than 280 miles of continuous network coverage with the most disparate branch locations being approximately 140 miles apart and encompassing some of the most difficult rain and foliage regions in the United States.
About ERF Wireless
ERF Wireless Inc. is a fully reporting public corporation located in League City, Texas, and is the parent company of ERF Oil & Gas Services, ERF Enterprise Network Services, ERF Bundled Wireless Services, ERF Wireless Messaging Services and ERF Network Services. The company specializes in providing wireless and broadband product and service solutions to enterprise, commercial and residential clients on a regional, national and international basis. Its principals have been in the wireless broadband, network integration, triple-play FTTH, IPTV and content delivery business for more than 40 years. For more information, please visit our websites at [ www.erfwireless.com ] and [ www.erfwireless.net ] or call 281-538-2101. (ERFWG)
Forward-looking statements in this release regarding ERF Wireless Inc. are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the company's products, increased levels of competition, new products and technological changes, the company's dependence upon third-party suppliers, intellectual property rights, and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.
