Wescorp Energy Inc WSCEE

April Newsletter:

[pioneer69]

 April, 2011

In this newsletter we outline Wescorp’s strategy of growth through strategic partnerships, and the markets we foresee the H2Omaxx operating in.

Business Model

Wescorp’s model is to develop the H2Omaxx technology, prove its applications, identify strategic partners and then license or joint venture with the partner. The partners then become responsible for market development and sales. Wescorp will establish the commercial capability of the H2Omaxx through sales locally. Through the joint venture approach, the partners, who have established regional or market vertical strength, will drive greater sales. Joint venture or licensing agreements are often difficult to establish, but once established, the relationship enables a technology company such as Wescorp to jump up the sales and market penetration curves.

Allied Holdings Group/Wescorp Marine

Our joint venture with the Allied Holdings Group (Allied), through the creation of Wescorp Marine Inc., is an important step into a new market. Allied has been successfully operating in the U.S. military and commercial marine market for approximately 30 years. Allied is particularly good at identifying technologies that can be adapted for the unique operating challenges that exist on a ship at sea. Allied knows the market needs, the regulators, and the significant customers.

Effective oil-water separation on-board ships are an operating challenge. Few technologies can operate reliably and effectively on a heaving platform, such as a ship at sea. Of those technologies that can operate at sea, considerable maintenance and cleaning is required, and there are reliability concerns. The changing regulatory environment, both in the U.S. and elsewhere, is making the effective separation of oil from both bilge and ballast water a key environmental and compliance issue. Better and more reliable technology will be required to achieve these objectives.

For example, the U.S. Environmental Protection Agency and the Department of Defense are in the final stages of developing “Uniform National Discharge Standards”, to define how military vessels must comply with U.S. regulatory standards. Both the U.S. Navy and the U.S. Army operate significant fleets, with considerable new vessels scheduled to be delivered over the next several years. By working with Allied to meet this military marine market demand, and similar civilian marine market demands, Wescorp is able to enter into a new market vertical much faster and more effectively.

Additional Markets

While the oil and gas industry is Wescorp’s principal market, the application of the H2Omaxx to water contamination issues is much broader. With the delivery of the new, second generation unit, Wescorp is testing the capability of the H2Omaxx to operate in additional markets, such as environmental remediation and water discharge compliance.

Wescorp has been operating the new unit in the Vancouver area, on contaminated fluids that are not from the oil and gas industry. These fluids contain a wide range of common industrial contaminants and suspended solids (fine and ultrafine particles), as well as oil. What we have found is that the H2Omaxx can remove not only the oil but also the solids, enabling the remaining fluid to be cleaned more effectively by a further technology. We have also found that the operation of the new H2Omaxx technology has not, to date, been affected by the broad range of contaminants in the water treated.

Why is this discovery technically important? In the environmental remediation industry, where water often needs to be cleaned to stringent discharge standards, filters and `super filters’ such as a membrane in a reverse osmosis system are used to clean contaminated water. Unfortunately, the effectiveness of filters and membranes are significantly reduced when there is oil or solids in the contaminated water. Both oil and solids clog filters and membranes, often making the use of these technologies expensive or impractical.

Many industries are paying significant dollars to have contaminated water removed by a tanker and shipped to a hazardous waste disposal and treatment center. These industries do not have a mobile technology solution that enables the contaminated water to be treated on-site and discharged into the environment as clean water, thereby reducing the costs associated with shipping the water off-site.

By utilizing the H2Omaxx technology as an initial pre-treatment phase and removing the oil and solids, we are able to then direct the pre-treated water into a filter or membrane system, for final cleaning. Both the H2Omaxx and a filter or membrane system are mobile, enabling Wescorp to treat the contaminated water on the customer’s site. In other words, Wescorp is now able to offer customers a clean water solution that is mobile, easy to operate and, we believe, cost effective. We have begun the process of finding a joint venture partner for this new industry vertical, similar to the relationship we have developed with Allied.

H2Omaxx unit updates

With the new H20maxx unit, Wescorp is discovering that the H2Omaxx technology can be a clean water solution for industrial customers beyond the oil and gas industry. We intend to keep the new unit in the Vancouver area for several more weeks to treat a range of contaminated waters, and to further develop our understanding of this new, exciting opportunity. Once we have completed this work, the new unit will head into the oil and gas fields. Wescorp has several potential customers interested in operating the new unit on their site, and subject to scheduling issues, we expect the new unit to begin operating at these sites over the summer.

The first generation H2Omaxx unit continues to operate in Alberta, north of Edmonton. Both Wescorp and the customer have been pleased with the effectiveness of the H2Omaxx. The customer is supporting the H2Omaxx continuing to operate on site, centrally located in Alberta oil and gas fields, to enable additional companies to see the technology and consider the H2Omaxx as a solution for their needs.

Tours of the new unit in Vancouver or the unit operating north of Edmonton can be arranged but is subject to permission of the customer where the unit is operating. Please call or email Patty Lew-Lapointe if you wish to see either the new unit or the 2,000 bpd unit in operation at a customer site.