AOT Target Market Segmentation
The Company’s market segmentation can be broken into three main categories. Upstream Producers, Midstream Transporters and Downstream Refiners. Each of the three market segments is comprised of multiple companies around the world. Some firms will receive greater benefit from viscosity reduction than others.
The largest number of potential customers, with the highest potential for benefit from viscosity reduction are the upstream companies, most notably within the US borders. STWA is in discussions with upstream producers in Colorado, Wyoming, Utah, Texas, Alabama and Alberta, Canada about our AOT technology. The upstream oil sector is also commonly known as the exploration and production (E&P) sector.
The second largest number of potential customers, with the highest potential for benefit from viscosity reduction are the midstream companies, most notably within the US borders. STWA is also in discussions with midstream transporters based in Alberta, Canada, Colorado, Wyoming, Utah, Texas, Alabama, and Oklahoma, about our AOT The midstream sector involves the transportation by transmission or distribution lines, for storage and marketing of the various oil and gas products produced by natural gas and crude oil processing plants and by petroleum crude oil refineries.
The third largest number of potential customers is the downstream market. These companies have not been identified as potential purchasers of our AOT products, but are identified from benefitting greatly from the benefits of the upstream and midstream companies that provide them with the material for refinement and should be considered as potential customers. The downstream sector commonly refers to the refining of petroleum crude oil and the processing and purifying of raw natural gas, as well as the marketing and distribution of products derived from crude oil and natural gas. The downstream sector reaches consumers through products such as gasoline or petrol, kerosene, jet fuel, diesel oil, heating oil, fuel oils, lubricants, waxes, asphalt, natural gas, and liquified petroleum gas (LPG) as well as hundreds of petrochemicals.
Midstream operations are often included in the downstream category and considered to be a part of the downstream sector.
| 1. | Upstream producer benefits from use of our AOT technology |
| 1. | Increased flow rate capacities, especially in the fall through spring cold temperatures. |
| 2. | Increased revenues via ability to unlock greater flow rates through bottleneck reduction. |
| 3. | Decreased operational expenditure power required per barrel, saving power consumption, especially of use with on-site remote power generators, resulting in lower localized emissions and power costs, in addition to reducing pass-through power costs charged by midstream pipeline operator. |
| 4. | Reduced trucking and/or train reliance to transport crude to market, leading to reduced operational expenditure bringing product long distances to market. |
| 5. | Supplemental to heat required with heavy content crude oil, reducing operational expenditure while increasing safety and uptime. (Paraffin wax is a white or colorless soft solid that is derived from petroleum and consists of a mixture of hydrocarbon molecules containing between twenty and forty carbon atoms.) |
| 6. | Supplemental to diluent content required with heavy content crude oil, reducing operational expenditure and infrastructure complications bringing diluent on-site and subsequent refining it out of the crude, increasing the value of each barrel transported to refinery and reducing transport costs. |
| 7. | Supplemental to polymeric friction reducers content required with high friction lines, reducing operational expenditure and infrastructure complications bringing these friction reducers on-site and subsequent refining it out of the crude, increasing the value of each barrel transported to refinery and reducing transport costs. Polymeric friction reducers are a chemical drag reducing composition comprising of long-chain polymers used to reduce the turbulence loss and friction within pipeline systems. |
| 8. | Increased oilfield valuations via improved transport capacities. |
| 2. | Midstream transporters benefits from use of our AOT technology: |
| 1. | Increased revenues via higher flow rate capacities. |
| 2. | Increased spot capacity revenues via committed and uncommitted flow increases. |
| 3. | Decreased OPEX per barrel moved, enabling strategic advantages internally and lower transport costs. |
| 4. | Decreased emissions per barrel opportunities for Environmental Protection Agency (EPA) and Department of Transportation (DOT) governmental advantages. |
| 5. | Decreased friction per mile, leading to reduced thermal build on “bullet” style transmission lines. |
| 6. | Decreased Reid Vapor Pressure (RVP) build at end of line collection tank batteries due to reduced thermal build per mile, resulting in EPA compliance advantages. |
| 7. | Decreased pressure loss per mile, leading to increased margins of safety and regulatory compliance advantages via decreased pressure required to move product per mile. |
| 8. | Increased flow flexibilities through the fall, winter and spring months, enabling more balanced flow rates throughout the year in high temperature variance locations, leading to increased annual revenues and more stable flow rate capacities throughout the year. |
| 3. | Downstream refiners benefits from use of our AOT Technology: |
| 1. | Reduced downstream collection tank RVP enables lower tank emissions due to reduced end of line temperatures. |
| 2. | Reduced RVP due to reduced diluent content secondary potential. |
| 3. | Simplified refinement due to potential reduced diluent concentration. |
| 4. | Simplified refinement due to potential reduced polymeric friction reducer concentration. |
| 5. | Increased revenue potential due to greater concentration of high-value crude content. |
| 6. | Increased refinement volume flexibility due to greater flow flexibility during the fall-winter-spring months. |
| 7. | Reduced truck and train delivery traffic, as greater volume moves through pipeline content, simplifying down-line logistics for offloading. |
