Wescorp Energy announced that its wholly-owned subsidiary, Total Fluid Solutions, Inc. (TFS), has completed a master lease agreement with an oil and gas company with operations in Texas, Kansas and Wyoming to use its safe, effective and cost-effective technology for cleaning and separating oil from produced water. As terms of the agreement, Wescorp Energy will develop, deploy and operate as many as 256 water remediation units, as well as provide trained technicians qualified to operate and service the equipment.
The assembly and deployment of these units is scheduled to be completed through various phases over the next 60 months. Presently, the company’s technicians are evaluating the geographic field locations, the hydrocarbon contamination level of the produced water, and the volume of fluid being produced on a daily basis in each region. Once the assessment is complete, the assembly of the first unit will begin. Wescorp anticipates having the first commercial unit in full field operation before the end of 2008.
According to Wescorp, the lease rates for this contract will provide the company with a full return of capital expenses and every unit will provide positive cash flow in less than 12 months. There are 5 standard through-put or volume capacity designs for the water remediation units. The daily lease rate varies depending on the through-put capacity of each particular unit, with rates ranging from $900 to $2,500 per day.
Mark Norris, Chairman of Wescorp Energy, stated, “This order for up to 256 of our patented water remediation units is monumental for Wescorp. The anticipated reoccurring revenue from these units is expected to allow the company to grow by quantum leaps. This technology has been designed and constructed to operate in oil and gas fields for the life of the producing wells – often as long as 15 or 20 years. We believe that this large initial order, primarily based on results from our 2,000 barrel-per-day commercial test unit, will lead to strong product acceptance by the industry. By reducing the amount of hydrocarbon in the produced water, this technology reduces environmental liabilities, the frequency of service and repairs on disposal and injection wells, and recovers additional hydrocarbons. Environmentally conscious companies are winning by reducing operation costs and increasing operating margins.”
“Most operators in the oil and gas industry are increasing their investments in new technologies to help with the water crisis they are currently facing. Wescorp has the technology to provide solutions that provide positive environmental impact as well as strong economic advantages. This is a great day for Wescorp – our dedication and persistence to provide technology-based operating solutions to the conventional and unconventional oil and gas producers has paid off. Wescorp is becoming a leader in water remediation and water management for oil and gas operators. When the industry uses the Total Fluid Solution to remediate water, the environment reaps rewards and the oil company saves money,” Doug Biles, President and CEO of Wescorp, commented.
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