STW Resources Holding Corp. (fka STWSQ)

[rdragon]

WATER MANAGEMENT SOLUTIONS
& OILFIELD SERVICES

CORPORATE NEWSLETTER OTCQB: STWS
A Brief Note From Our CEO

The first quarter of this year has been a highly productive one at STW Resources Holding Corp, across each of our three subsidiaries in the water management and oilfield services. As other energy industry players are struggling to survive amid falling oil prices, we are making significant strides forward both with our innovative water processing/reclamation operations and our pipeline construction/maintenance services. Notably, but by no means exclusively, the fourth quarter of 2014 and the first quarter of 2015 have seen some significant gains for us, among them:


• We are looking at full commercialization within six months of our breakthrough water processing technologies.

• In January, we signed an initial $2.9-million contract to build, operate and maintain a comprehensive system of water processing facilities for a large, integrated NYSE-listed oil and gas company with operations across the giant Permian Basin in Texas.

• We are preparing for double growth this year of our subsidiary, STW Pipeline Maintenance and Construction, through an expansion of services and an increased scope of new construction.

• Last year saw us enter into long-term maintenance contracts that produced over $15 million in the first 12 months, while we also significantly reduced overhead to achieve positive net cash flow and profitability.

• Our pipeline safety record has remained impeccable.

Throughout, we have remained loyal to our belief that technological innovations are the key to growth, and we continue to lead our company to fast-track growth, integrating our midstream operations in an ambitious de-risking strategy, vigilantly maintaining a healthy balance sheet and successfully shielding investors from the vulnerabilities of the commodities market.

We have accomplished much of this through a strong focus on maintenance of some of the hundreds of thousands of miles of aging pipelines crisscrossing Texas—pipelines that have endless anomalies, which means endless demand for repair; as well as on building new connectors for which there is almost an equal level of demand.

We are connecting newly drilled wells from the past 3-5 years. Perhaps above all, however, our focus on the precious element of water—both for local communities and the oil and gas industry—has poised us for major gains and positioned us as an intuitive, innovative and environmentally sensitive company that has enormous traction in an area of the market in which demand is nearly infinite.

There is a never-ending need for more fresh water both for municipalities and industrial use. We are commercializing our advanced water processing technologies in these sectors.

We look forward to what the remainder of the year brings, and are excited at the prospect of bringing even more previously inaccessible potable water to the citizens of drought-stricken Texas, to those oil and gas companies who cannot continue the shale boom without it, and to other industries who could otherwise not operate in the dry state.

Thank you for joining us on this exciting adventure, and we hope you enjoy the newsletter.

Stanley T. Weiner

CEO and Chairman of the Board

Water—Our Most Precious Commodity

We have been honored over the course of the past year to be described by Texans as the local company who will help provide the solution for the dry state’s droughts by accessing previously unused sources of water and successfully processing new brackish sources into potable water.

We are overwhelmed at the support that has poured in from all sides in this endeavor—from local authorities who desperately need more drinking water for communities and other industries that need water in order to bring new manufacturing to Texas…, to oil and gas companies who need more supplies for operations and production activities. We are also receiving interested calls from other states that are in need of new water sources.

Texas is already facing unprecedented drought, and now a new report is predicting a decades-long ‘mega drought’ later this century.

Particularly given the urgency of the situation, the past year has been a very exciting one, beginning with the contracting of our first water processing project in Midland, Texas, in the Permian Basin in 2014 for installation and deployment in 2015.

Mentone, Texas, which is the first installation of our Salttech Technology in the United States, has been a resounding success for showing the efficacy of the technology. Here, the technologically advanced Dutch-developed Salttech DyVaR Zero Liquid Discharge (ZLD) water processing technology, for which we have the exclusive license in the US, Canada, Mexico and Central America, is providing Mentone with as much drinking water as it needs—and far more than it ever could have imagined.

This is also an important technology for oil and gas companies, as it will save them money on their drilling activities by reclaiming their drilling and fracking water, while also serving as a conservation method to conserve our precious fresh water for municipal and agricultural needs.

A New Water Deal with a $25-billion Oil & Gas Company

Water-starved Texas is a highly competitive playing field and the competition between oil companies and other users of water is intense. The shale boom and the hydraulic fracturing revolution have exponentially raised the stakes in this competition as demand for water has soared.

A major highlight of the first quarter of this year has been our first order from a $25-billion NYSE-listed oil and gas company operating in the Permian Basin—a deal that has the approval of the Texas Commission on Environmental Quality (TCEQ).

We are very excited about the deployment of our first Salttech System in the US for a drinking water application set inline behind our custom proprietary hybrid high-brackish reverse osmosis system.

Significantly, this project will not require any