QS Energy, Inc.

STWA Market Watch: Pipeline Bottlenecks Putting Pricing Hurt on Permian Basin Producers

August 22, 2014

Just five years ago producers in West Texas’ Permian Basin believed the region’s best output was behind it. With a history dating back to the first well drilled in 1921, the 250 mile wide and 300 mile long Permian seemed played out until fracturing and other enhanced oil recovery techniques unlocked oil and gas from the once-inaccessible shale. Today, the majors and independents active in the area have enabled Permian to regain its standing as one of North America’s major oil and natural gas producing regions. Recently the U.S. Energy Information Administration projected total output to hit 1.6 million barrels per day this month (August 2014), a jump of over 60 percent since 2007.

Unfortunately the surge in production is exposing a woefully inadequate transportation infrastructure, resulting in delivery delays and driving down the spot price for Permian. Currently its trading $21 below the benchmark U.S. price set in Cushing, Oklahoma, the widest gap seen since 1991, when tracking of the price differential started.

Scott Sheffield, CEO of Pioneer Natural Resources, says that with Permian output growing by some 250,000 barrels per year, the region will demand another 1 million barrels per day of transportation capacity by 2018. Regional crude production markets such as Permian facing pipeline capacity challenges so severe that they are hindering profits and affecting delivery to refineries are experiencing precisely the problems that AOT is designed to solve.

Read the entire Houston Chronicle article here or here.

STWA Clean Tech Partner

To complement our alignment as a clean tech vendor to the energy sector, we have partnered with Climate Friendly, a firm that provides carbon management solutions to business and consumers. As a founding member of ICROA, the non-profit International Carbon Reduction and Offset Alliance, Climate Friendly enables executives, engineers and project managers to measure the carbon footprint of their operations and calculate and offset greenhouse gas emissions generated. Our objective of partnering with Climate Friendly is to enable us to determine the total carbon savings our customers achieve using AOT and other solutions we introduce into our product portfolio. We anticipate this data will be of strong interest to the industry at large and provide invaluable insight to prospective clients.  


To expand the Company’s options for additional capitalization, under my direction Controller Mike McMullen has developed a detailed financial analysis for use as a negotiating tool with investment banks. We will be using these materials to make presentations to private banks, institutional investors and family offices.

Highlights of STWA European Visit

During the month of July, John Valenti and I met with a broad spectrum of high value targets, including oil production and transport companies, investment banks and stakeholders. In addition to deepening several well established relationships, we are in discussions with TAL Oil, operator of the Transalpine pipeline, a 465 kilometers (289 mile) long infrastructure that runs through the Alps, connecting Italy, Austria and Germany; and AWP Petro, Austrian operator of the Adria-Wein pipeline which branches off the Transalpine.

We also had very productive meetings with one independent oil exploration and transportation company with operations in Europe and Africa. Our distributor and partner, Energy Tech Africa Ltd. (ETA), has been collaborating with them extensively. In addition to providing their engineers with hydraulic analysis of an AOT installation on one of their existing pipelines, our partner Temple University has been testing crude samples from their projects for several years.

STWA SEC Filings

Last week the Company filed an 8-K (August 14th) and a 10-Q (August 11th), both of which are posted on the SEC Filings page within the Investors area of our website. We recommend our shareholders and other parties following our progress review these documents as they may contain information we are unable to disclose otherwise due to confidentiality agreements with our customers.

As always, we thank you for your support and look forward to your continued comments.

Best regards,

Greggory Bigger
Chief Executive Officer, Chairman of the Board
STWA, Inc.

Investor Relations & Media Contact:

STWA, Inc.
Tel: (805) 845-3581
E-mail: investor@stwa.com

Source: Save The World Air, Inc.