American Energy Partners Inc (AEPT)

[tzcreg]

I think when you look at the PRs from last year in the context of a license/royality deal the numbers looks impressive.

The costs of these power plants and fuel plants are in the $100s of Millions; therefore they have to partner/license the technology in the beginning.

If you look at a company with a simular technology like Alcar Chemicals and look at their business model of licensing you can see the advantages.

If we extrapolate some projected revenues, figuring a 0.10/g royality.

Just by using last years PR of 25,200,000 barrels/year * 42g/b * 0.10 g = $105M/year just from this 7 production plant deal alone.

Then there is the power plants and fertilizers.. etc..
So we are talking a potential of several $100sM++ / year in license revenues.

Ofcouse this is not going to happen overnight, it will take several years to develop. I'd give 12-18 months to get first full scale production plants up and running but the earning growth rate after that should be exponential.

My bet is for an upfront license fee of several million each and then a downsteam royality. These upfront license fees will be used to develope the demonstration plant (they will be loosing drexel) and the engineering staff to tweek the technology for each license.