Completes Acquisition of Hydrocardon Dynamics
Melbourne, April 7, 2017 AEST (ABN Newswire) - Indago Energy Ltd (ASX:INK) (POGLY:OTCMKTS) has completed the acquisition of an exceptional new clean oil technology and business that allows for the swift, clean and cost effective treatment of heavy, asphaltenic and paraffinic oils.
The technology can be applied to improve oil flow rates by the re-liquification of oil deposition from oil wells and pipelines and can also be used to recover oil from storage facilities. The product has proved its effectiveness in large-scale commercial oil wells and pipelines in Malaysia and India.
The key product, HCD Multiflow(TM) is a small, specially engineered carbon-based organic molecule that can disaggregate the large, naturally occurring agglomerations of waxes and asphaltenes in heavy or paraffinic oil.
This reduces the oils pour point, viscosity and increases API gravity thus providing outstanding oil flow assurance, reducing operating costs and increasing production. The HCD Multiflow(TM) molecule can also separate water and sediment from the crude oil and the product will have far-reaching applications in the productibility and transport of heavy/paraffinic oils, as already evidenced by the product's use in a large offshore oil field and with many successful trials to its credit.
With 70% of the world's oil resources catagorised as heavy or bitumen, the potential applications for the technology are substantial right across the oil production, transportation, storage and refining chain.
Indago has paid the vendors 30 million ordinary shares and 33.2 million options (exercisable at $0.25c for two years) and will issue additional shares if certain revenue and EBITDA hurdles are met. Indago will also pay a royalty of 5% of net sales to inventor Nick Castellano.
Indago has been revitalised by a team led by Stephen Mitchell since he assumed the Chairman's role early in 2016. Mitchell was formerly head of Molopo Energy which he steered from a $1m ASX shell into an ASX 200 oil and gas company. He and fellow directors Don Beard (former CEO of Peko Oil & Cultus Petroleum and Molopo's former Chairman) and seasoned resources investment banker Ray Shorrocks, will be joined on the board by two representatives from HCD namely the founder and inventor of the technology, Nick Castellano, along with HCD's Managing Director Allan Ritchie. Both will fulfil Executive Director roles.
The technology is proven, however is at an early stage of application in the industry with revenues of around A$1.2m in 2016 where HCD Multiflow(TM) was being used by Malaysia's national oil company, Petronas, on a major offshore platform and pipeline system. This contract has not resumed in 2017 while an alternate product is tested. Early encouraging and reproducible results have been reported in trials at a major oilfield in India. Test work is also scheduled for Brazil later in the year as well as new projects identified by Indago.
Indago will use its technical, financial and commercial resources to expand the technology rapidly and will also look to acquire existing oil accumulations where the technology will be used to increase or commence oil production. Many of the world's oil provinces produce waxy or heavy crudes and experience associated production and transport problems and will represent early targets for the growth in both oil production and technology sales.
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About Indago Energy Ltd
Indago Energy Ltd (ASX:INK) (OTCMKTS:POGLY) is an Australian listed company engaged in oil and gas exploration, development and production. Indago's project portfolio includes liquid rich producing assets together with substantial oil development and exploration acreage in the United States.
The Company's Exploration and Production focus is on high growth oil and gas projects offering scalability of production, cash flows and reserves. Indago currently has several producing projects together with a significant acreage position. The Company's immediate focus is the development of its Capitola Oil Project located in an active region of the Cline Shale resource play along the Eastern Shelf of the Permian Basin, Texas. The project's core development and exploitation opportunities are shallower multiple "stacked" sandstones and limestones to depths of 7,000 feet which are effectively produced from vertically drilled wells. Indago's value driven model is executed through exploiting shallower, well defined intervals with advanced completion and stimulation technology within known produced oil fields together with exposure to the emerging Cline Shale resource play.
Indago's shares are publicly traded on the Australian Securities Exchange (ASX ticker: INK) and also as American Depositary Receipts on the OTCQX (ADR ticker: POGLY).