Big Heat Truck – the magic happens in the black tank
Vancouver, BC (PRWEB) March 07, 2013
Global Green Matrix Corp. is the new kid on the block in the Frac Fluid Heating Business. This oilfield equipment-rental company entered the sector with a technological edge, using an innovative and highly efficient water heating system called “Big Heat”.
Fracking is a technique used to release oil and gas from shale/tight reservoir formations by sending water and sand down a well at ultra-high pressure. The pressurized fluid fractures the formation rock allowing trapped oil and gas to flow to the well.
The fracking process requires that the water be heated at around 30 ̊C. This is done via mobile heating trucks, or trailers rented from oilfield service companies. Heating 30,000 or 40,000 barrels of water is no small feat. Fracking is a costly practice requiring significant time and capital, as producers typically rent these units at rates as high as $2,500 per hour.
The bill for fracking can add up quickly, especially in the cold winter months when heaters need to be running 24 hours for several days. Heating fuel accounts for the lion’s share of the bill since the industry uses mostly diesel for fuel. This can cost up to $1,000 worth of diesel per hour.
The problem with all of this, is that 30% of this fuel is being burned for nothing because the units used by the industry average 70% in heating efficiency. This means only 70% of the generated heat goes into the water.
Consequently, $300 worth of heat is lost every hour!
It is at this point in the process that GGX has changed the game. Their water heating system enjoys a 95% heating efficiency. That’s very close to the 100% efficiency mark. GGX can heat water more efficiently and significantly faster than the competition since almost no heat is lost.
Moreover, Big Heat uses propane for heating, a much less expensive fuel, in fact it is 4x times cheaper than diesel. Propane is also a more environmentally friendly fuel than gasoline or diesel. Coupled with a near perfect heating efficiency, the solution is greener than any water heating unit on the market.
But while greener is better, it’s really the bottom line that matters for most of the clients.
Using propane instead of diesel as well as using smaller amounts of fuel to heat the same amount of water gives the company a huge cost advantage (even against competitors using propane for their traditional units). Big Heat units are rented for $1,250 per hour, that’s a 50% discount off a heating job for a similar outcome.
Big Heat Truck – the magic happens in the black tank
The cost effectiveness advantage comes is a practical choice at a time where the oil patch is focused on cutting costs. However, the lower pricing power does not come at the expense of profitability. The company still enjoys healthy profit margins, similar or even better than the competition.
GGX’s license to operate this highly efficient technology came through a transformative acquisition in March of 2012. It bought Intercept rentals, a profitable company with an established customer base of major oil and gas producers. The transaction included the exclusive rights to the use of the “Big Heat” water heating technology.
The first truck mounted unit went into the field last October generating $335K in revenue from various jobs up until December. And because the company only had 1 unit available, it had to make some painful decisions:
“We turned down work, it hurt as we would have loved to have 2 more units available” said Randy Hayward, President and CEO of Global Green Matrix.
A second trailer mounted unit became operational on February 17. The unit quickly got to work allowing the company to take on bigger jobs and new customers. The company has so far worked with about a dozen different major oil and gas producers. Several of these are repeat customers as GGX gains visibility and credibility faster.
It’s a sign the technology works!
GGX is currently in the process of expanding its fleet in order to accommodate a growing customer base. GGX is adding 3 more units which would put the company on track to exit the year with a total of 5 units.
Herein lies the big growth opportunity, the company will be able to meet increasing demand and perform larger scale jobs. This means the next phase of growth could be funded organically from cash flow.
The technology that Global Green Matrix uses is greener, faster and, most importantly, cheaper than the competition. As long as activity in the Western Canadian Sedimentary Basin does not come to a standstill, the company should be able to capitalize on its flagship product. GGX is on track to hit its growth curve and adding more units will translate into more business.
Disclaimer: Global Green Matrix Corp. sponsored and reviewed this article. This is not an invitation to buy or sell GGX shares, please do your own due diligence before taking an investment decision.
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