Licence Agreement with Calfrac for DT UltraVert

RNS Number : 9392Y

Highlands Natural Resources PLC

23 May 2016

 

23 May 2016

Highlands Natural Resources plc ('Highlands' or 'the Company')

Signs Licence Agreement with Calfrac in respect to DT Ultravert

Highlands Natural Resources, the London listed oil and gas company, is pleased to announce that it has signed a licence agreement with Calfrac Well Services Corp. ('Calfrac'), a leading pressure-pumping provider in the US, in relation to Diversion Technologies, LLC's ('Diversion') proprietary "DT Ultravert" re-fracking technology.  Highlands owns a 75% stake in Diversion's current patent applications both in the US and globally.

Calfrac has licensed DT Ultravert on a shared exclusivity basis for use in connection with its commercial Hydraulic Fracturing operations, activities and services in seven states of the United States of America.  The licence agreement has an initial term of two years and will then automatically renew for consecutive one-year periods, unless and until terminated.  Additionally, Highlands has the exclusive right to market Nitrogen gas to CalFrac at current market rates for all fracking operations undertaken by CalFrac using DT Ultravert throughout the term of the licence agreement.  CalFrac will endeavour to provide certain data to Highlands, which the Company and Diversion may use with a view to the further development of the DT Ultravert re-fracking technology.  Highlands and Diversion are also entitled to a 2% royalty based on the revenue received by CalFrac from each fracking operation during the term of the licence agreement which uses the DT Ultravert re-fracking technology.

Highlands CEO Robert B. Price said, "We are delighted to have entered into another licence agreement with a highly reputable oilfield services provider in the US and Canada.  Together with our agreement with Schlumberger, these agreements will help accelerate the market penetration, commercialisation and industry adoption of DT Ultravert, a technology we believe has the potential to transform and significantly reduce the costs associated with unconventional exploration and production via re-fracking using a diverter technology, particularly in the current oil price environment."

About Diversion and DT Ultravert

In May 2015, the Company acquired a 75 per cent. stake in US based Diversion's current and future patent applications both in the US and globally covering a new diverter well stimulation technology, known as "DT Ultravert".  Diversion is a US based well stimulation technology company currently patenting its diverter technology, "DT Ultravert", internationally. Well stimulation (fracking) is a US$50 billion per year industry (source: Grandview Research report on the hydraulic fracturing market, October 2014) and re-stimulation is an emerging trend due to its ability to increase oil and gas production without the expense of drilling new wells.

By re-fracking a well using Diversion Technology, oil can be released without the cost of a newly drilled well. Development of innovative oil field technology is likely to represent a highly disruptive force in the market. Highlands believes that with "DT Ultravert" it may have such a breakthrough and is currently in licensing discussions with major recognised oilfield service companies.

Considering the potential upside available if the technology proves successful, and the low capex required to roll out this type of business, which has a royalty-based revenue structure, the Board believes this is a very significant opportunity.

Calfrac is an independent provider of specialised oilfield services.  It is an innovative pressure pumping services provider focused on North America's premier unconventional natural gas and light oil plays plus strategic international markets. Calfrac is listed on the Toronto Stock Exchange. For further information please visit the website at http://www.calfrac.com/ 

**ENDS**

For further information, please visit www.highlandsnr.com, or contact:

Robert Price	Highlands Natural Resources plc	+1 (0)  918 361 7000
Nick Tulloch	Cenkos Securities plc	[phone]
Neil McDonald	Cenkos Securities plc	[phone] / [phone]
Lottie Brocklehurst	St Brides Partners Ltd	[phone]
Elisabeth Cowell	St Brides Partners Ltd	[phone]

 

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