Following a major announcement by OriginOil (OTC: OOIL) today, the stock roared out of the gate gaining over 20% in the first half hour of trading. The company announced that it will be setting up a new, dedicated business to market its continuous-flow, high efficiency, and chemical-free technology for frack water cleanup and petroleum recovery,
R. Gerald Bailey, former president of Exxon (NYSE: XOM), Arabian Gulf, Abu Dhabi and UAE, will advise the group. Dr. Bailey holds a PhD in chemical engineering from Columbia Pacific University. He regularly publishes and presents on both the science and business of oil and gas. Bill Charneski, General Manager, will head the group.
Riggs Eckelberry, the CEO of Origin, said, “We are delighted that Dr. Bailey has agreed to join us as industry advisor. He brings a vast network of relationships and credibility to our venture. As General Manager with P&L responsibility, Bill Charneski will focus on achieving rapid technical and commercial milestones. I’m confident this team will quickly get us commercial success in this fast-moving sector.”
With countless articles and documentaries recently focusing on the dangers from frack water and raising public awareness, OriginOil is expected to spend millions on aggressively pursuing its new proprietary technology.
Upon the announcement, Dr. Bailey praised OriginOil and explained, “The process is quite an achievement and has so much potential. I am looking forward to helping get this process into wide use in the oil and gas industry as a highly portable, high-flow and chemical-free way to maximize oil recovery and re-use the huge amounts of water used in oil exploration today.”
Presently, the oil industry produces 2.5 times the amount of water than it does oil. This number is expected to double in the next 15 years. Treatment and disposal of frack water is set to become a huge segment of the energy market as oil companies are presently producing over 90 million barrels of oil each day globally. Additionally, water treatment can reach as high as $12 a barrel, making it a potentially hyper-lucrative market of over $500 billion dollars.
As oil reserves throughout the world diminish each day, companies are forced to go deeper and deeper. This deep drilling demands more water and consequently more and more hydraulic fracturing. OriginOil is poised to take advantage of this rise in fracking and should not be overlooked when looking at potential investments in the energy sector.
OriginOil has traded as high as $5.02 in the last year, but as recently as June 6, 2012, it reached its all-time low. This may turn out to be just the news OriginOil needs in order to make breakout gains.
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