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STW Resources To Demonstrate OriginOil's Frack Water Recycling Technology On Permian Basin Water

|Includes: CLR, COP, EOG, HES, OriginClear, Inc. (OCLN), OXY, STWS

This morning, OriginOil Inc. (OTCPK:OOIL) announced plans to demonstrate OriginOil's CLEAN-FRACâ„¢ solution at a disposal well site in the Permian Basin to STW Resources Holding Corp. (STWS) customers.

"We have been impressed with OriginOil's technology; the water quality tests to date show compelling results and the system's operating costs are significantly lower than other technologies on the market," stated Stanley Weiner, Chairman and Chief Executive Officer. "Testing and demonstrating the CLEAN-FRAC process on our water here in West Texas is the next step in commercial implementation. We are confident these sales demonstrations have strong prospects of leading to system installations at multiple sites throughout the Permian and Eagle Ford regions.

STW Resources consults and provides customized water analysis, reclamation and remediation services to a variety of complex oil and gas produced and flowback water, brackish water, industrial, and municipal applications throughout several geographic locations. The company posted nearly $2m in gross revenues for 2013 and trades at roughly 23 times earnings so this venture puts a demonstratable clean frac technology not only in front of a large company like STW but it also translates to the company's current client base.

Bill Charneski, President of OriginOil's Oil & Gas Division, stated, "We believe their partnership offers immense opportunities for integration of CLEAN-FRAC in commercial applications. We look forward to working with their customer base which covers 35 counties in Texas and New Mexico."

There are currently more than 30 large oil and gas producers in the Bakken region which include the likes of ConocoPhillips (NYSE:COP), Continental Resources (NYSE:CLR), EOG Resources (NYSE:EOG), and Occidental Petroleum (NYSE:OXY) to name a few. The Permian Basin in Texas and New Mexico is the nation's most prolific oil producing area. Six formations within the basin have provided the bulk of Permian's 60% increase in oil output since 2007. Crude oil production in the Permian Basin has increased from a low point of 850,000 barrels per day (bbl/d) in 2007 to 1,350,000 bbl/d in 2013.

Crude oil production from Permian Basin counties has exceeded production from the federal offshore Gulf of Mexico region since March 2013, making the Permian the largest crude oil producing region in the United States. In 2013, the Permian Basin accounted for 18% of total U.S. crude oil production.

As far as the amount of water it takes to frack that, we're talking an average of 3 barrels of water per 1 barrel of produced shale oil, which means astronomical amounts of H2O needed to pull billions of barrels of oil from the Permian Basin, alone!

"We are very excited and confident about the opportunity to demonstrate CLEAN-FRAC at a Permian Basin disposal well site. We will be processing both frac flowback and produced water from regional oil and gas wells, which will constitute a totally different influent water quality than water flowing back from gas wells in Colorado," stated Lee Portillo, Vice President of Engineering for OriginOil.

For the oil & gas industry, OriginOil is helping clean up produced water and recycle fracking water, to reduce harm to the environment and lower costs. The EWS technology both saves money through cleaning frack water flowback and it also curbs energy usage on project sites by more than half that of the major market players.

The company has been undertaking intense research and development during the first half of the year to quickly build on its EWS technology as noted by the most recently filed quarterly report. OriginOil's focus has been on an aggressive licensing and private label strategy as opposed to a simple equipment sales program. According to management, they see this as much more fruitful long-term revenue generation strategy and for early investors, this could mean much larger upside potential once the company signs new contracts for future licensees.