LWP Technologies Limited, Suite 29 Level 54 111 Eagle Street Brisbane Qld 4000 ABN 80 112 379 503 │T +61 (0)7 3122 2233 │F +61 (0)7 3012 6699 | E [email protected] | W www.Lwptech.com NEW INDEPENDENT TEST RESULTS FOR POTENTIAL US LICENSEE FURTHER VALIDATE LWP’S FLY-ASH PROPPANTS Independent tests commissioned by a potential US licensee/JV Partner validate LWP’s low-cost fly-ash ceramic proppants capability to compete with frac sand Conductivity and permeability performance tests compared white and brown sands against LWP low-cost fly-ash ceramic proppants Test results confirm LWP’s low-cost fly-ash ceramic proppants significantly outperform frac sands Negotiations with potential US partner and other potential parties are ongoing Solid progress being made in India with Pune plant upgrade ASX ANNOUNCEMENT 2 November 2016 Energy technology company LWP Technologies Limited (ASX:LWP) (“LWP” “the Company”) is pleased to provide the attached independent expert testing report of LWP’s low-cost fly-ash based ceramic proppants, which are used in the hydraulic fracturing of unconventional oil & gas wells. The report clearly demonstrates the superior performance of LWP low-cost fly-ash based ceramic proppants over mined frac sands. Previous conductivity test results compared the performance of LWP high-strength ceramic proppants with high strength ceramic proppants made from bauxite and/or kaolin clay. However, depressed oil and gas prices have seen almost all oil and gas producers opting for low-cost mined frac sand proppants due to the high costs of high-strength ceramic proppants, often together with expensive transport and logistics costs. To LWP’s great advantage, LWP has been able to redesign its ceramic proppants to minimise manufacturing costs, so that LWP low-cost ceramic proppants can potentially compete with mined frac sand on price. The test report shows that compressive strength of LWP low-cost ceramic proppants is significantly higher than comparable mined frac sand. For personal use only
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NEW INDEPENDENT TEST RESULTS FOR … · their early stage investigation in LWP ceramic proppants. ... LWP’s Chairman Siegfried Konig added, “LWP’s complete focus is on advancing
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LWP Technologies Limited, Suite 29 Level 54 111 Eagle Street Brisbane Qld 4000
ABN 80 112 379 503 │T +61 (0)7 3122 2233 │F +61 (0)7 3012 6699 | E [email protected] | W www.Lwptech.com LWP Technologies Limited, Suite 29 Level 54 111 Eagle Street Brisbane
Independent tests commissioned by a potential US licensee/JV Partner validate LWP’s low-cost fly-ash ceramic proppants capability to compete with frac sand
Conductivity and permeability performance tests compared white and brown
sands against LWP low-cost fly-ash ceramic proppants
Negotiations with potential US partner and other potential parties are ongoing Solid progress being made in India with Pune plant upgrade
ASX ANNOUNCEMENT 2 November 2016 Energy technology company LWP Technologies Limited (ASX:LWP) (“LWP” “the Company”) is pleased to provide the attached independent expert testing report of LWP’s low-cost fly-ash based ceramic proppants, which are used in the hydraulic fracturing of unconventional oil & gas wells. The report clearly demonstrates the superior performance of LWP low-cost fly-ash based ceramic proppants over mined frac sands. Previous conductivity test results compared the performance of LWP high-strength ceramic proppants with high strength ceramic proppants made from bauxite and/or kaolin clay. However, depressed oil and gas prices have seen almost all oil and gas producers opting for low-cost mined frac sand proppants due to the high costs of high-strength ceramic proppants, often together with expensive transport and logistics costs. To LWP’s great advantage, LWP has been able to redesign its ceramic proppants to minimise manufacturing costs, so that LWP low-cost ceramic proppants can potentially compete with mined frac sand on price. The test report shows that compressive strength of LWP low-cost ceramic proppants is significantly higher than comparable mined frac sand.
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LWP Technologies Limited, Suite 29 Level 54 111 Eagle Street Brisbane Qld 4000
ABN 80 112 379 503 │T +61 (0)7 3122 2233 │F +61 (0)7 3012 6699 | E [email protected] | W www.Lwptech.com LWP Technologies Limited, Suite 29 Level 54 111 Eagle Street Brisbane
Enhanced conductivity and permeability directly contribute to maximizing the productivity of unconventional oil and gas wells. A website link to an article from the SPE provides an overview of conductivity in layman’s terms. http://petrowiki.org/Propping_agents_and_fracture_conductivity The development of LWP’s low-cost fly-ash ceramic proppant has allowed discussions with potential licensees that had been discontinued due to the decline in oil and gas prices, to recommence. LWP commenced early stage discussions 6 weeks ago with a US-based company that expressed interest in a potential license or Joint Venture partner in North America, to commercialise and manufacture LWP’s low-cost flyash ceramic proppants. The potential licensee/JV partner, who must remain confidential at this time due to non-disclosure arrangements, commissioned this latest conductivity/permeability test as part of their early stage investigation in LWP ceramic proppants. PropTester Inc, a highly-regarded independent expert laboratory located in Houston Texas that specialises in the research and testing of products used in the hydraulic fracturing and cement operations, completed the test work. The PropTester tests were designed to replicate accelerated downhole operations of a typical hydraulic fracturing operation, and tested the comparative performance of mined white frac sand, mined brown frac sand and LWP low-cost fly-ash ceramic proppant samples for conductivity and permeability. The complete test results that accompany this ASX filing which show that LWP proppants display superior conductivity and permeability compared to the mined frac sand proppants tested using identical testing regimen. (see tables on page 14) LWP’s Dr. David Henson commented: “These latest results continue to validate the superior performance of our low-cost fly-ash based ceramic proppants. The review of these results marks the next step in negotiations with a potential US-based licensee/JV partner that is closely assessing our technology.” “With oil & gas markets stabilising, we are witnessing growing levels of inquiry from a number of parties about our technology, and these latest results support our discussions and negotiations with all parties.” LWP’s Chairman Siegfried Konig added, “LWP’s complete focus is on advancing with the commercialisation and manufacture of our fly-ash ceramic proppants, and we are pleased to see increasing activity across a number of markets. The results of the tests in the United States are most encouraging. Also, progress in India with our JV partner Hallmark on the plant upgrade in Pune is ongoing, with clean-up and upgrade operations at the plant progressing.” “We look forward to updating shareholders on our progress across the business in the months to come.”
Siegfried Konig Chairman LWP Technologies Limited Phone: 0411 111 193 Email: [email protected] For Media & Investors please contact: Ben Jarvis, Six Degrees Investor Relations +61 (0) 413 150 448
About LWP Technologies
LWP Technologies Limited (LWP) is an Australian oil and gas technology company focused on commercialising next generation, fly-ash based, proppants for use in hydraulic fracturing of oil and gas wells globally. LWP is seeking to commercialise its proppants as a cost effective, superior alternative to bauxite and clay based ceramic proppants, typically used in hydraulic fracturing operations currently. The Company commenced proppant production from its pilot scale proppant manufacturing plant in Queensland, Australia, in Q3, 2015. LWP is seeking joint venture partners and/or licensees to commercialise its proppant product, and deliver significant returns to shareholders. About Proppants
Proppants are a sand-like commodity used to ‘prop’ open fractures in shale rocks which allows oil and gas to flow. Proppants are often the single largest cost item in the fracking process and represent a multi-billion dollar global market annually. Traditional ceramic proppants are made from clay and/or bauxite. LWP Technologies ceramic proppants are majority manufactured from fly-ash, a by‐product of coal fired power plants. The Company is of the view that its unique proppant product has the potential to lead the industry due to:
the widespread abundant availability of fly-ash, often near to oil and gas shale resources;
the ultra-light weight of LWP fly-ash proppants; and
the ability of LWP proppants to withstand the very high pressures and heat of deep wells. LWP proppants have been certified by Independent Experts to meet or exceed both the American Petroleum Institute standards and the ISO standards.