Eco-Stim Energy Solutions (OTCQB: ESES), according to their website, is an environmentally focused oilfield service and technology company providing proprietary field management technologies and well stimulation and completion services to oil and gas producers drilling in the rapidly expanding international unconventional shale markets. Eco-Stim's proprietary methodology and technology offers the potential to decrease the number of stages stimulated in shale plays through a unique process that predicts high probability production zones while confirming those production zones using the latest generation down-hole diagnostic tools. In addition, Eco-Stim offers its clients completion techniques that can dramatically reduce horsepower requirements, emissions, surface footprint and water usage. Eco-Stim seeks to deliver well completion services with better technology, better ecology and significantly improved economics for unconventional oil and gas producers worldwide. SNNLive spoke with Alexander Nickolatos, CFO of Eco-Stim Energy Solutions, Inc. at the LD Micro “Main Event” 2014 in Bel Air, CA.
Mr. Nickolatos begins with an overview of the company, “Eco-Stim is an oilfield services company, focused on global shale. We’ve basically founded this company with a simple premise that what’s happening in North America with these shale plays is a global phenomena, it’s not just unique to the United States, and we want to take the US technology to the international markets.”
When asked about the countries the company is working in, Mr. Nickolatos states, “We have a philosophy of how we rank countries and what we look at. The top of our list right now is actually Argentina,” and the reasons for why Argentina, he continues, “First of all, the geology is excellent, but second of all, it really has a lot to do with the utilization: what activity levels do we see there, who are the other companies that we see moving there, the drilling rigs moving into the area, the government program for spending money in the country, the national oil company, YPF, and what they’re doing, other investors and where they’re looking, like, George Soros. So, those are some of the things that we look at when evaluating a market to go in to.”
“If you look at Argentina, what you’ll see historically,” he continues, “is that this is a country that has gone from being an exporter of oil and gas to being an importer of oil and gas, so what’s happened over the last several years is, as the production has declined based on policies that they have had in place, they have had to start importing at very exorbitant rates. So they’re paying an exorbitant amount, like to the tune of $14-$15 billion to import energy into a country. And, when you have a country with a fragile central reserve system, it’s not sustainable. Therefore, they have to start to change, and this is what drives part of their policy.”
“If you look at it [Argentina] as a comparison to the United States, you’ll see that this is very similar to a place like the Permian Basin, where they have been producing oil and gas for 100 years, and what’s great about that, is also in our ranking criteria, is that when you go there, you have an educated working force, so you have people that understand this industry, they are used to working in that community with those resources, and it’s not that you have to import all of the labor force; you can go there locally and find exactly what you need.” On working with local culture in Argentina, “I think it’s extremely important no matter where you work that you’re extremely sensitive to the local customs, the practices and the culture. It’s impossible to me to go into a place and expect that place to be the United States…It’s understanding that local culture is not just something to take casually, it’s something that matters, and so when we go into a country, what we try to do is be a local company – we try not to be an American company, we try to be an Argentine company. We hire Argentine people, we have Argentine people running our business, we have Argentine people throughout the organization: two of our senior members of management team are Argentine, one of our directors is Argentine. So, we don’t just say we’re an American company, we’re not – we really try to be a local company,” Mr. Nickolatos states.
He concludes by looking ahead to 2015, “We’re very unique in that we have the ability to work in a sort of protected market – Argentina has historically put price caps in place in their country. And, today, that’s actually working in our benefit. The price in Argentina for oil is about $82, so that’s significantly higher than the prices that you’re seeing. We’re just about to start our first operation in December, and so really, within the next week or two, we should have an operation starting. So, we’re going to start seeing some real revenue in the first quarter, and I think that after that, we’re going to continue to grow this business. I’m really excited about where we’re at, and getting starting with this company.”
Since speaking with Alexander in early December, the company has put out the following press releases:
On December 16th, 2014: Eco-Stim Energy Solutions to Provide Operational Update
On December 16th, 2014: Eco-Stim Energy Solutions & Y-TEC Sign Joint Technology Development Agreement
On December 18th, 2014: Eco-Stim Energy Solutions Provides Operational Update in Conference Call
For more information about Eco-Stim Energy Solutions, visit their website: www.Ecostim-Es.com
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