FracRock International, Inc. announced that it has signed a three year agreement with a significant E&P operator in the Neuquen basin of Argentina. The agreement sets forth the basic terms and conditions necessary to negotiate and execute a three year contract at market prices (with a 5% discount) and a minimum 40% utilization. Using market prices in effect today, the contract would yield revenues in excess of $250 million over the initial term. In addition to traditional hydraulic fracturing methods based on 30,000 horsepower of modern hydraulic fracturing equipment, FracRock will provide its unique EcoFrac Solutions which are eco-friendly methodologies to assist operators in developing the Vaca Muerta shale play in an environmentally responsible manner.
EcoFrac Solutions combine a number of exploration and production technologies in a manner that allow for a significant reduction in the use of water and horsepower while optimizing the number and placement of hydraulic fractures. In addition, EcoFrac Solutions will include FracRock's proprietary Geo-Predict package followed later in the development cycle by its Geo-Iteration methodology. Over time FracRock believes these proprietary technologies will help our customers more accurately target the optimal areas of the formation while minimizing the number of stages required to obtain the desired production. In addition, FracRock has formed alliances with highly skilled partners that will be able to provide a full suite of unconventional "green" technologies to operators working in Argentina and other international markets.
Bjarte Bruheim, the Company's executive chairman, stated, "Argentina has been a focal point for FracRock International since the Company's formation and we are excited about securing such a meaningful agreement in such a short period of time. We believe the 20+ billion barrel opportunity in Argentina is just too big for the world's leading oil and gas operators to ignore. FracRock is continuing to evaluate other business opportunities in Argentina and we are hopeful that major investments into the development of the Vaca Muerta play will continue to be announced over the coming months. If our customers are prepared to make significant investments in Argentina, we believe that such announcements will signal that the risk in Argentina is manageable."
The Company's Chief Executive Officer, J. Christopher Boswell, added, "We are extremely pleased to have secured such a significant milestone. The confidence our customer has demonstrated in our experience and capabilities speaks to the Company's assimilation of oilfield technologies which we have packaged together to provide a unique offering to our customers in Argentina. As unconventional plays begin to be developed around the world, the experiences from operators in North America will allow governments and operators alike to start the field development at a high level on the learning curve. FracRock expects to be a leader at identifying and packaging the very best technologies from North America and deploying those technologies in the international markets. We have already assembled a powerful alliance of technology partners to achieve this objective and will continue to add new technologies going forward."
About the Company
FracRock International, Inc., a British Virgin Islands company, is an environmentally conscious oilfield service and technology company focused on providing the latest well stimulation and completion techniques to international unconventional markets currently being developed. Through the Company's unique EcoFrac Solutions, FracRock and its partners will deliver more "ecologically friendly" well stimulation services expected to be in high demand worldwide.