Energy Recovery $ERII Scores Huge Contract… - PowerPoint PPT Presentation

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Energy Recovery $ERII Scores Huge Contract…

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Energy Recovery $ERII just landed a huge deal with oilfield giant Schlumberger $SLB for their revolutionary pressure pumping technology. – PowerPoint PPT presentation

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Title: Energy Recovery $ERII Scores Huge Contract…


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Commodity Trading Research
Energy Recovery ERII Scores Huge Contract
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Welcome to Commodity Trading Research Your
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  • Hi, My name is Justin and Im with Commodity
    Trading Research, today were reviewing our
    recently published article

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  • Energy Recovery ERII Scores Huge Contract

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  • Pressure energy technology provider, Energy
    Recovery ERII, just landed a huge contract with
    oil field services giant Schlumberger SLB.

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  • In exchange for exclusive rights to ERIIs
    VorTeqhydraulic pumping system for the next 15
    years, SLB is forking over 125 million in
    upfront payments to ERII, plus annual royalties
    for the length of the contract.

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  • Without question, its a game changing deal for
    ERII.
  • Not surprisingly, investors sent shares of the
    small-cap company soaring last week

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  • As you can see, ERII is up 188 on word of the
    huge contract win.

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  • What isVorTeq?

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  • According to ERIIs website, their technology
    replaces the traditional missile system currently
    used in hydraulic fracturing.

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  • While the traditional missile system is
    successful in sending water, proppants, and
    chemicals down the well at extremely high
    pressure (15,000 psi), its prone to breakdown
    due to intense wear on hydraulic fracturing pumps.

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  • ERIIs VorTeqsolves that problem
  • The system processes clean water and
    transfershydraulic energy to the fracking fluid
    going downhole.

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  • The game changing technology dramatically reduces
    drilling down time, which in turn increases
    efficiency.
  • Of course, efficiency is the name of the game in
    the oil industry right now.

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  • With oil prices sinking to multi-year lows the
    oil industry is being forced to cut costs
    wherever possible.The cheaper they can bring the
    commodity out of the ground the better.

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  • Now, heres the question

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  • Is there potential for additional share price
    gains in ERII going forward? Its important to
    understand that ERIIs hydraulic fracturing
    technology is completely locked up by SLB.

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  • The onlyVorTeqrevenue gains beyond the 125
    million in upfront payments will come from annual
    royalties, which were undisclosed. But heres the
    deal

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  • ERII holds promising pressure energy technology
    in other industries. The companys proprietary
    equipment candramatically increase efficiency in
    oil pipelines, chemical plants, and
    desalinization projects.

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  • Fact is, ERII has avery promising product
    pipeline. And now, thanks to the huge cash
    infusion from SLB, the company has the wind at
    its back to aggressively pursue new contracts.

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  • With that said, should you buy ERII at current
    levels?

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  • No.
  • Shares have simply run too far, too fast the past
    week. However, keep a close eye on ERII in
    coming months.

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  • A new long position in the 5 area would
    provideinvestors a lower risk buy in point for
    long-term gains. Whats the potential upside in
    the long run?

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  • Heres my take

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  • As long as ERIIs pumping technology performs as
    expected, theres a distinct possibility SLB
    purchases ERII outright in coming years.

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  • After all, the oil field giant has used the
    partner first and acquire later strategy many
    times in the past.

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  • Of course, its impossible to put a number on
    what such a deal would bring ERII, but I highly
    doubtthe companys management team would give up
    control cheaply!

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