STW Resources Holding Corp. (fka STWSQ)

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http://www.otcmarkets.com/stock/STWS/news?id=105836

STW Resources Signs Project Finance Agreement for $4.55 Million Initially to Drill and Commercialize the Ft. Stockton Water Lease

And its non dilutive!!!!!

May 28, 2015
OTC Disclosure & News Service

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STW Resources Holding Corp, (OTCQB: STWS), an integrated provider of water management, including water processing, desalination, reclamation and remediation, and oilfield services, announced today that the company has signed an agreement with H2O Investments, a world renowned water processing and reclamation company and family investment office in Houston, Texas, to finance the well development program for the Ft. Stockton, Texas lease. The 11 well development agreement with Ft. Stockton is an integral part of STW Water’s initial West Texas Water Project for the “design, engineer, build, and own model.”

David Bruce, President of H2O Investments, stated, “Our investment in the Ft Stockton lease is the beginning of a successful partnership with STW for many years to come. H2O Investments is pleased to be part of a project that provides a new source of water to the people of West Texas.”

In a non-dilutive project debt partnership, H2O Investments will provide the capital to drill the production well and build-out a water station to sell water to producers. Additionally, they will construct a short pipeline to implement the sale of water to STW’s municipal water customers. The Company has maintained a monitor well less than a mile away that has already been drilled. The monitor well has been tested and shows production rates of one million plus gallons per day through a much smaller hole size than is planned for the production well. The size of the hole on this production well will be much larger in diameter and the Company is expecting larger volumes of water per day.

The West Texas Water Project has a large impact for the citizens and industry of West Texas. It will eventually be part of a master water plan lasting 50 to 100 years to insure that West Texans have an ample supply of fresh water. Since West Texas is naturally an arid region and with low volumes of available fresh water, without an alternative source of fresh water, the municipalities and industry in West Texas will not be able to grow and flourish. Only with a concerted effort to build out water infrastructure and utilizing available aquifers, will West Texas accomplish their economic goals. The three hydrogeological reports/studies that have been performed on the Capitan Reef in this area indicate there are approximately 14 million acre-feet or 5.6 trillion gallons of fresh water available.

The consulting firm over the project is 25-year veteran Lane Drilling Consultants (LDC) based out of Midland, Texas. O’Ryan Drilling which has operated in the Permian Basin for 10 years drilling for Oil and Gas, as well as developing numerous municipal water wells, owns the drilling rig that the company will be utilizing on the initial well.

Timeline for First of Eleven Development Wells Begins in June

STW has begun preparing the lease to move the rig on site by building the pad and the initial rathole. The triple stack rig (Rig #7) from O’Ryan is scheduled to arrive in early June. It will take approximately two days to rig up and test all equipment before they are ready to commence drilling operations or “spud” the well.

Once the well has reached total depth and logged and completed the well, STW will then install the pump to a depth of 300’-500’ depending on water level in the hole. STW and the hydrogeologist will then begin a 72-hour pump test to determine drawdown of the water level and determine flow rates and volume. The anticipated pumping capacity is expected to be anywhere from 1700gpm to 2800gpm (gallons per minute) or 2.5 – 4.0 million gallons of water per day. STW will also run a full water analysis to meet all Texas Commission on Environmental Quality (TCEQ) requirements for municipal water. A hydrogeological report/study by a licensed third party firm to evaluate the reserves in place will be performed. As water production rates and reserves are proven, added value is created on the company’s balance sheet.

Alan Murphy, President of STW Water, said, “This is the first of eleven wells slated for drilling on the Ft. Stockton lease. We have worked on this Project for 4+ years and I’m very excited about moving forward at this time. Knowing that this well is the offset to our monitor well that has been tested to produce 1+ million gallons per day makes it even more exciting since I consider this a development well and not exploratory since we know the water is there. Also, I am expecting significantly more production from this hole since we are drilling a much larger hole on this well compared to the monitor well. Once we have this well up and running, we will move to drilling and completing the other ten wells as delineated in our well development agreement with the City of Ft. Stockton.”