H2Omaxx Report ~ March 2011
Welcome to the first issue of this newsletter!
In this issue we will focus on the operational progress of the2,000 and10, 000 barrel-per-day (bpd) H2Omaxx systems. We will also describehow customers, with Escarp help, can be more effective in their business throughthe use of the H2Omaxx technology.
2,000 bpd H2Omaxx
The 2,000 bpd unit has been operating on a customer trial basisfor some weeks, treating a range of oil field fluids and solids inAlberta. Initial results are strong, and on that basis, the customer has requesteda three--week extension,to the end of April, to evaluate how best to integrate the unit into itsoperations. We will continue to receive the lab results and build ourbook of operating data for presentations to additional customers who arekeenly following the 2,000 bpd operations.
10,000 bpd “Next Generation” H2Omaxx
We recently announced that the new 10,000 bpd fluid treatmentunit has not only been commissioned, but is now also operating at the firstinterested customer site.
This unit has now completed its first fluid treatment trialsfor the customer, and we are awaiting lab results to determine the effectivenessof the H2Omaxx technology on this particular type of waste stream.
Starting next week, the “10k” unit will be treating a secondwaste stream of hydrocarbon--impactedfluids, with lab results following two to three weeks after that. Importantly,both of the customer’s treatment trials are taking place with fluids that the H2Omaxxhas not had an opportunity to treat before. This enables Wescorp tocontinue assessing the breadth of industries that the H2Omaxx technologycan service.
The Customer Sales Cycle
We are excited to be working with a variety of interestedparties, large and small, and with varying roles in the hydrocarbonindustries, to understand how best to utilize H2Omaxx technology.
New technologies often need an initial period of broad customereducation before there is technology adaptation. One of the reasonsis that, although customers may have identified operating challenges, theyoften don’t have sufficient base-line data upon which to make informed decisionsright away. For other customers, where existing operating equipment may need tobe modified, considerable thought needs to go into how best to optimize site operationsbefore adapting new technology.
Wescorp’s team helps customers understand operating issues andopportunities specific to the customer’s own needs and interests, in orderto arrive at the right decision to implement an H2Omaxx unit. Additional considerations,such as whether environmental approvals are needed before the unit can be movedon site, must also be considered and analyzed. Our objective and expectation isthat once this evaluation process is complete, the customer and Wescorp willhave a common belief that the H2Omaxx technology is a possible solution thatshould be tested.
Trial Periods at Customer Sites
The waterchemistry, industrial chemical use and operating conditions can vary considerablyfrom one customer to another. In other words, customers may need asolution tailored to their needs. After completing an assessment in conjunctionwith the customer, we offer our technology to the customer for an operatingtrial.
Once the unit is on a customer site, a series of trials is runon a range of fluids, and under various conditions, to best assess thereal-time performance of the technologywithin the customer’s operations. We will spend considerable time on customer sitesin 2011, helping customers respond to a wide range of difficult yet importanthydrocarbon, chemical and water use and disposal issues, and ultimately sellingwhat we believe to be one of the best solutions for a wide range ofneeds.
Canadian Market Listing
Wescorp is on track to file its prospectus with the Alberta SecuritiesCommission ("ASC") in April. ASC approval is requiredfor Wescorp to list its shares on a Canadian exchange. The filing will be made onthe heels of Wescorp filing its year-end Form10-K financial report with the U.S. Securities andExchange Commission (the "SEC"), which will include muchof the information required by the ASC. We will update you as we movethrough the ASC process.