American Energy Partners, Inc. (XFUL) Offers a Tri
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- HCPA (subsidiary) possesses the technical expertise to source, implement, and distribute at-profit reclaimed water.
- AES (subsidiary) provides off the shelf and custom designed treatment technologies across customer base that contribute to HCPA’s business model of low-cost treatment and distribution.
- Gilbert (subsidiary) eyeing investment opportunities within the Marcellus and Utica regions (PA, OH, and WV areas). With Gilbert as an owner and producer of energy sources in the region, it and each competitor is a potential customer for AEPI services.
Converde Energy USA, Inc. (OTC: XFUL), d/b/a American Energy Partners, Inc., may not be walking on water, but its management has created a business model that looks likely to pull off a miracle. Based in Pennsylvania, American Energy Partners, Inc. (AEPI) and its subsidiaries together comprise an integrated vertical that sources, scrubs, and supplies water to mining, oil and gas, power and other industrial concerns. Now producing half of oil output and two-thirds of gas output in the U.S., fracking is an industry that undoubtedly will require large volume providers like AEPI to keep its head above water.
Water plays an essential role in hydraulic fracturing (fracking), and a typical well requires about 4.4 million gallons. That’s the amount used by 11,000 American families every day. Most of that water (63%) comes from surface sources such as rivers; another substantial amount (20%) is purchased from public water utilities that source surface supplies and wells; almost as much (15%) is recycled treated flowback water from previously fracked wells; while the rest (2%) are the ‘active fracking ingredients’, consisting of proppants and chemicals. Proppants are the suspensions of sand that keep bedrock fissures open, allowing gas and oil to flow out. With about 4,475 locations still to be drilled between the Marcellus and Utica regions of Pennsylvania and Ohio, AEPI’s future as a water provider looks rosy. “The Utica and Marcellus shale natural gas plays based respectively in Ohio and Pennsylvania have provided 85-90% of U.S. shale gas production growth since start of 2012,” according to Forbes (http://nnw.fm/1f3lA).
AEPI’s triple play, comprising Hydration Company of PA (HCPA), American Energy Solutions, LLC (AES) and Gilbert Oil & Gas Company (Gilbert), integrates proprietary interests in water sources, design and treatment solutions, and marketing opportunities and business alliances.
The HCPA model implementation begins when hydrological studies are carried out to locate the largest pools of non-potable water, i.e., water that is not safe for drinking. Negotiations are then initiated with the current owners to gain access to these pools. After additional hydrological and engineering studies are performed and the required permits obtained, a filtration system is installed. Lastly, a dynamically-adjustable, turn-key platform goes online, allowing HCPA to distribute as required.
HCPA’s hands-on execution is backed up by sister subsidiary American Energy Solutions (AES). AES provides the technologies that HCPA uses to implement its strategy of providing cost-effective water treatment and distribution. AES plans to develop an in-house team with the ultimate aim of building market share in treatment technologies and the design of distribution methodologies. Meanwhile, AEPI plans to use Gilbert’s broad industry valuation experience to source drilling, operating, and partnership opportunities in the upstream oil and gas space. With so much going for it, AEPI seems to be offering investors in need of comfort a bridge over troubled water.
For more information, visit the company’s website at www.AmericanEnergy-Inc.com
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