XS Energy (Private) – Water Waste Management Services in Alberta

XS Energy (“XS”) is a newly formed Private Company (with intent to go public in 2016). XS offers specialized waste water handling services to oil and gas producers in Alberta. Company’s goal is to steadily build and acquire a portfolio of water waste disposal assets in the WCSB, in order to absorb/gain market share and exploit the growing trend of outsourcing waste handling needs.

Water Volumes Increasing; Outsourcing is on the Up and Up

  • Wait times are 4 to 6 hours to unload fluid at Drayton Valley (location of asset #1)
  • Truckers on south side of river from Kaybob are hauling all the way to Drayton to avoid wait times
  • Wait times at Fox Creek are still 12 to 14 hours (location of asset #2)
  • Pembina Pipeline terminals are within a few miles from each facility
  • Drayton is busy with the Cardium drilling in the area (Arc, Whitecap, Penn West, Sinopec, Vermillion and Journey are active) = strong demand for water handling facilities

Strong demand means low risk entry for XS 

  • XS is expecting 10 to 12 tandem trucks/day at Drayton
  • Contracts from 3 various Companies have been initiated; LOI’s in the works
  • Shell Canada looking for more disposal at Fox Creek

To commence operations, two assets are ready to go 

  • Drayton: Class 1B waste water disposal well in the Drayton Valley area of AB; well is licensed and awaiting facilities to be built in order to commence taking third party fluids for disposal; the facility is estimated to cost ~$2M, and commence production (ie. disposal) in Dec 2015 (~30 days post close of financing and start of construction)
  • Fox Creek: A second disposal well has been identified in the Fox Creek area of Alberta, expected to close in Nov ’15. XS will commence completion operations to convert into a disposal well and meet the required regulations. While doing so, XS will be applying for Directive 65 Class 1B waste disposal license (typically 4-6 months to acquire), and then commence production ~Mar/Apr ’16 (funding required, and approx. 30-day facility construction time)

For more information, please contact us.

This is not an offer to buy or sell securities. Information provided herein is for general information purposes only, and is subject to change without notice.

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