I hope everyone had a wonderful holiday, and I want to wish you all a healthy, happy and prosperous New Year!
This past year was certainly one of substantial developments and continued progress towards realizing the goals of our company. We successfully demonstrated our oil extraction technology prototype machine, had a major university test and analyze our oil extraction technology with extremely positive results and a few months ago we announced a joint venture with MEA Solutions. Creating this joint venture with MEA was a major milestone towards realizing our goal of becoming a leader in providing innovative and exceptional solutions to the energy industry.
As mentioned in last month’s press release, pilot operations will commence this month to demonstrate our technology for treating and recycling flowback and produced water for subsequent reuse in the fracking process. The next two weeks will be extremely busy for me. I will personally be involved in overseeing the setup of the water treatment operation and will be on site for the demonstrations to our financial and strategic partners. My hope is that these demonstrations will set the stage for proving and validating our technology and business model.
As you may have read, last week there was a magnitude 4.0 earthquake that struck Youngstown, Ohio. The Christian Science Monitor reported that, “[t]he temblor struck Dec. 31 and was the latest and strongest of 11 minor-to-light quakes that have hit the region since March. The epicenters are clustered around a wastewater injection well for a hydraulic fracturing operation. Understanding the potential effect hydraulic fracturing or related activities could have on local earthquake risks is one question some researchers hope to answer as they try to develop tools for communities.”
Bloomberg News stated “A New Year’s Eve earthquake in Youngstown, Ohio, that prompted the state to stop operations at five wells used to dispose of wastewater from natural-gas and oil drilling won’t affect production.”
The most common way to dispose of flowback and produced water is to inject the water into disposal wells that carry it deep into formations beneath the surface. In some, but not all, locations a problem arises when these pressurized fluids find their way into faults. This procedure causes the fluids to act like a hydraulic jack eventually separating locked sections in the formations allowing them to slip. This process is believed to have caused the recent earthquakes in Ohio.
Freestone Water Solutions treatment system assists in reducing the amount of flowback and produced water that must be injected into disposal wells. Our ability to treat, recycle and most importantly reuse the water is what the industry and the affected communities need. Water is our earth’s most precious commodity and Freestone Resources and MEA have pledged to do its part in safeguarding our nation’s precious resource, as well as providing, what I believe, is the best model for establishing the greatest value for our loyal and patient shareholders.
Freestone Resources will update our shareholders this month on the outcome of these important demonstrations.
Very Sincerely,
Clayton Carter, President and CEO
