American Power Group Corporation (OTCQB: APGI) announced today that its Trident NGL Services Division has secured its second flare capture services relationship with one of the largest oil companies in the world whose identity has not been disclosed due to non-disclosure and competitive reasons. APG's Trident Services Division will be up-fitting two of the customer's well sites with Trident's Modular Flare To Fuel™ Capture and Recovery System in the North Dakota Bakken oil and gas region. Installation of both systems is scheduled to occur in the next thirty to sixty days allowing Trident to begin monetizing the captured flare by converting the gas to saleable Natural Gas Liquids ("NGL's").
APG recently announced a license agreement with Trident Resources, LLC ("Trident") for the exclusive worldwide right to commercialize Trident's proprietary NGL processing technology. APG purchased certain of Trident's operating assets including two existing mobile NGL processing systems and recently announced a commitment for the financing of two additional systems in response to strong demand from oil and gas operators looking for an effective solution to capture their flare on existing remote and stranded well sites. An average remote or stranded well site producing one to two million cubic feet of flared gas per day has the capacity to produce several million gallons of NGL per year making this a multi-billion dollar regulatory-driven market.
What is the NGL market and where does APG's Trident NGL Services Division fit? When oil is extracted from shale, a mixture of hydrocarbon gases (methane, ethane, propane, butane, pentane and other heavy gases) reach the surface at each well site. These gases are either gathered in low-pressure pipelines for downstream NGL extraction by mid-stream processing companies or flared into the atmosphere when the gas-gathering infrastructure is too far away (remote well sites) or the pipeline is insufficient to accommodate the volumes of associated gas (stranded well sites). These remote and stranded well sites are under increasing regulatory requirements to either capture the flared gas or significantly reduce oil output. APG's proprietary Trident NGL capture and recovery process is the emerging leader in capturing and converting a higher percent of the gases at these remote and stranded well sites with its mobile and modular design when compared to other competitive capture technologies that cannot meet the 85% capture regulation due on January 1, 2016. NGL's can be sold to a variety of end markets for heating, emulsifiers, or as a combined NGL liquid called Y Grade that can be sold to midstream companies who separate the liquids into their final commodities.
Lyle Jensen, CEO of American Power Group, stated, "We are very pleased to have secured such a prestigious new customer within the first thirty days of entering the natural gas flare recapture and NGL processing business. We will now have two of the top six exploration and production companies in the Bakken region using our capture and recovery service. The Bakken region has over 2,500 well sites classified as remote or stranded where we intend to initially expand our Flare to Fuel™ capabilities."
Mr. Jensen added, "While it is an industry standard to not discuss output of any specific well site and each well site has its own production rate and declination curve, we believe this new customer relationship is capable of initially producing several million dollars of NGL revenue per year with an opportunity to expand our capabilities to more of their remote well sites in the future."