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Fracking’s Big Problem – and the Solution

From: Riggs Eckelberry
Los Angeles, May 3, 2013

Good morning!

“A new problem for fracking: Drillers are running out of water”

This article on Yahoo! Finance lays out the HUGE need for our technology:

Could severe water shortages short-circuit the US shale gas boom?

With 64% of the country in drought, water is looming as the next hot-button issue in the debate over hydrofracturing, also known as fracking…

It’s a huge problem:

In Colorado… 80% of the available water is already being drawn down for residential consumption or for industrial and agriculture use…

In Texas… 51% of wells are in high or extremely high water-stressed locations.

So what is to be done?

…some drillers are using recycled water and tapping non-drinking water sources such as wastewater and saltwater. Recycling rates for fracking water have hit 40% in Pennsylvania, for example.

The article makes this clear: this is now a matter that concerns oil and gas investors. It’s not too much to say that cleaning frack water is a national strategic priority.

International press focuses on issue

We made this point earlier this year in the Financial Times:

“Everybody is relying on fracking to make the US more energy independent, but there are major issues with water,” says Riggs Eckelberry, the chief executive of OriginOil, a company that has recently entered the business of water treatment for the oil and gas industry.

He adds: “It’s becoming critical to the entire US strategy to do something about this water.

(Fast Company and Scientific American repeated this in their own frack water coverage.)

Week Two on The Big Biz Show

Yesterday on Sully’s Big Biz Show, Emmy Award winner Russ T Nailz called our business “a clean water protection racket”… well I guess you could say that!

It was another great show, and I got to discuss our 99.9% announcement with cool slides and more. The shows take a day or two to be put up on our site, so I will let you know when it’s available to watch.

Meanwhile, last week’s show is up on our site, watch it here!

And over in algae…

Jose Sanchez is on his way back from Europe. He worked with Ennesys on their urban algae showcase building. We’ll be helping them build their waste water processing setup, using our Electro Water Separation™ technology (diagram).

And in early summer, we will ship them our latest Algae Appliance V2, the one with the cool new motherboard (did you see the photo of the prototype on Facebook?)

The reason is simple: our many prospective customers in Europe have a hard time traveling to the U.S. for a demo. Ennesys near Paris will be our European showcase.

And it will be amazing.

The $5 million initial algae sales opportunity

As you know, we have a licensing model. But licensing revenue takes a while to kick in.

For shorter term revenue, we are now selling demonstration systems. This can work extremely well in the algae industry, which is in a development stage. (Oil and Gas wants larger scale systems, we’ve learned.)

OK, so click on this link, which will bring up the visual model.
(Important: this isn’t a forecast. It is a sales model.)

The logic goes like this:

  • Out of 20 starter sales (our small Algae Appliance™), we assume five will upgrade to a mid-size system, and one of those to a large, seven-figure system.
  • That means the average algae demo customer is worth $162,500.
  • Now in North America, we have identified 54 prospective customers. Let’s assume we sell to 20% of these. That adds up to nearly $2 million in sales.
  • In the Rest of The World, we assume 200 prospects, and we sell to 10% of these. That means about $3 million.
  • So there you have it, $5 million in initial Algae Appliance sales!

Now we are making those sales happen — I will let you know very soon. Exciting developments!

Have a great weekend.
Riggs and Team

Riggs Eckelberry
President & CEO
OriginOil, Inc. (OOIL)

The 50 Hottest Companies in Bioenergy, 2012-2013 (photo)

Safe Harbor Statement:

Matters discussed in this update contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this update, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein, and while expected, there is no guarantee that we will attain the aforementioned anticipated developmental milestones. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.

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