Replies to post #39158 on QS Energy Inc (QSEP)

[As I See It]

Idiots said:

yet Bigger tells us over and over again in every Q that they are working to get the equipment "accepted" (as required for the lease to begin running)?

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Getting the equipment accepted, can just mean getting the equipment accepted for actual testing on Kinder Morgan's condensate line. Under a modified Agreement the AOT could have been accepted for testing without triggering a lease payment. Which is exactly what happened.


This is what they said in the last 10K, and it sure looks to me like acceptance occurred as defined under the original Agreement, yet no lease payment was made. Please explain how that could be without a modification of The Agreement.

In February 2016, the modified AOT equipment was installed at Kinder Morgan’s facility. Pre-acceptance testing was performed in April 2016, culminating in more than 24 hours of continuous operations. In-field viscosity measurements and pipeline data collected during this test indicated the AOT equipment operated as expected, resulting in viscosity reductions equivalent to those measured under laboratory conditions. Supervisory Control And Data Acquisition (“SCADA”) pipeline operating data collected by Kinder Morgan during this test indicated a pipeline pressure drop reduction consistent with expectations. Kinder Morgan provided the Company with a number of additional crude oil samples which were tested in the laboratory for future test correlation and operational planning purposes. BASED ON FINAL ANALYSIS OF IN FIELD TEST RESULTS, SCADA operating data and subsequent analysis of crude oil samples at Temple University, Kinder Morgan and QS Energy are considering moving the AOT test facility to a different, higher-volume pipeline location.

As I said in a previous post, the original Agreement defined acceptance as:

"commencing on the date when a successful completion of the Equipment's direct current power supply is successfully energized by Lessor"

Clearly that happened, unless you can explain some other way that the pipeline could experience "a pressure drop reduction consistent with expectations".

Just to be clear. It says "successfully energized". Not successfully energized for an hour, or a day, or a week, or a month. Just successfully energized.



I offer the above as an alternative theory to the one that says Kinder Morgan is "bye-bye". I am not filled with such hubris that I believe my theory is the only possibility.

While I think QSEP has been hamstrung by NDAs and the desire not to step on the toes of its potential customers, I agree with you that Greg Bigger failed miserably at communicating with QSEP shareholders during his tenure. I hope that the new CEO will be better at it.

I still believe strongly in the technology, and hope for the sake of all shareholders that it can be carried across the finish line soon.