ERI Advances Water For Energy Strategy
On 20 October 2015, Energy Recovery Inc. (ERI) announced an exclusive agreement with Schlumberger Technology Corp for use of ERI’s VorTeq high pressure hydraulic fracking pump. Schlumberger will pay ERI US$75 million upfront, followed by a combined US$50 million in milestone payments in 2016. Schlumberger will also pay annual royalties for the 15-year contract duration, dependent on the deployment of VorTeq systems. ERI launched the VorTeq pumping system in December 2014 and completed a six-month testing period of the new pump with Liberty Oilfield Services.
The deal comes amid substantial oil price declines– West Texas Intermediate (WTI) oil prices reached US$46 per barrel at the beginning of November 2015, down from a 2014 high of over US$107 per barrel. This downturn has been a catalyst for significant industry consolidation. Notably, Schlumberger announced in August 2015 its purchase of Cameron for US$15 billion.
- Low oil prices drive focus on increased operational efficiencies
- ERIs water diversification strategy takes hold
- Pure-play position sparks need for expansion