The Market

Overview

The largest and most accessible market is the oil and gas production industry, and this is our primary focus.  We also have had sufficient first-hand exposure to several industrial markets to gain an understanding of some of the potentials there.  Many segments of the industrial market could benefit from Watervap’s technology, but the market is both specialized and fragmented.  Since the oil and gas production market is compact and has a huge potential, we are not actively pursuing opportunities in the industrial markets.

Scoping the Watervap market is, at best, a plausible extrapolation from limited data.  To compensate for the lack of precision these projections are consciously biased to the low side.  These statistics are of necessity fragmented, but regardless of the metric selected, Watervap’s business potential is huge in just the United States.  The overseas oil and gas market has not yet been researched, but may well prove larger than the U.S. market.

What is remarkable is that new markets keep becoming evident:  most recently is the lithium mining industry.  Mining lithium is done by pumping the dissolved minerals to the surface and then evaporating the fluid to achieve dry salts.  Watervap’s technology is well suited where evaporation ponds are economically or technically infeasible.

United States Oil & Gas

To evaluate business impact consider these statistics:

• Operational cost including amortization:  $.03 – $.06 per gallon
• Operational cost is affected by energy cost, unit size, and features
• For estimating market size assume the price of a typical unit is $6 million

Oil & Gas Market		Market Share	Projected Watervap Business
• 600,000 U.S. active oil & gas wells		1%	6,000 installations total
	Major driller – 30,000 new wells Wyoming	2%	600 installations total
	Major oil & gas producer – 30,000 new wells in Marcellus shale over next 2 yrs	2%	600 installations total
	Major gas well driller – committed to 650 wells per year in Marcellus shale for 28 yrs	2%	12 installations total
• 14,000 Texas new wells drilled per year		2%	280 installations / yr.

Immediate Prospects in the oil and gas drilling industry:
   Prospect #1 wants one evaluation unit
   Prospect #2 has asked for exclusive world-wide license
   Prospect #3 wants 1 test unit in Canada
   Prospect #4 wants 1 small test unit in Europe

United States Industrial Market.

Many of the companies in these industries have small effluent flows and will require small Watervap units.  However, the aggregate Watervap potential in the United States is substantive.

Projected Watervap Market	Market Share	Projected Watervap Business
• 6,000 Chicken and Meat Cooking	10%	600 installations total
• 1,500 Operational Landfill Leachate	10%	150 installations total
• 7,500 Landfills closed in past 12 years (all    producing leachate)	2%	150 installations total

Industries Not Yet Researched
   Ethanol production
   Boiler feed water – water softener effluent
   Mine water
   Lithium mine effluent
   Cheese and other food industries

United States Market Summary

Regardless of the specific data points used, the aggregate business potential in the United States alone can conservatively be estimated as $50 – $100 million annually for many years. Additionally, inquires from overseas, particularly Europe, Middle East and Australia clearly indicate similar potentials there as well.

Although this plan has not considered the seawater desalination and agriculture markets they both have worthwhile potential, which can be tapped as Watervap matures.