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Re: markrhead post# 3264

Thursday, 07/22/2010 7:48:15 PM

Thursday, July 22, 2010 7:48:15 PM

Post# of 5511



this is from the wallstreetresource report of 2008



Ecosphere has sharpened its focus on flowback solutions and flowback water management within the natural gas drilling and production arena. The Company’s first two target markets are the Barnett and Woodford shales. As way of background, in order to drill for natural gas, a well must be “fraced”, which means that water must be pumped down a hole to force the natural gas out of the ground. The “frac” team goes in and “fracs” the well and then “plugs” the well. Approximately 2-3 weeks later, the completion team, which includes the flowback team, unplugs the well in order to initiate well flow and natural gas production.

“Frac flowback” water is the liquid that emerges from the well immediately after a well is unplugged, which represents approximately one-third of the total volume of water pumped in. Produced water represents the other two thirds of the frac water that is pumped down a well as well as water pre-existing in the formation. This produced water comes back to the surface mixed with the gas over the productive life of a well. The Company is now focusing primarily on treating both “frac flowback” water and “produced” water generated as a byproduct of natural gas drilling in the major shale gas basins within the United States.
The reason for this sharpened focus is simple. Given the amount of gas exploration and drilling that is currently taking place in domestic shale plays and the corresponding volume of “frac flowback” and “produced” water, the Company could stay busy seemingly forever in this one niche. More importantly, the Company intends to change the way that water is managed by recycling the wastewater at the actual drilling site likely saving the drilling companies millions of dollars per well and moving Ecosphere into the planning stage of each drill site in the U.S. In so doing, Ecosphere will transform the water disposal process from a back-end commodity to a critical component of well planning and drilling.

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