E.S.I. Environmental Sensors Inc.

E.S.I. Environmental Sensors Inc.

March 13, 2014 09:00 ET

ESI Secures Government Support, Key Partnerships for Oil Cut Meter Development

VICTORIA, BRITISH COLUMBIA--(Marketwired - March 13, 2014) - E. S. I. Environmental Sensors Inc. ("ESI" or the "Company") (TSX VENTURE:ESV) is pleased to announce with its developmental partner Dycor Technologies Inc. of Edmonton Alberta, the approval by the Board of Directors of Innovation Saskatchewan, for funding of their joint proposal for commercialization of an advanced oil cut sensor device. This funding announcement, by the Honourable Bill Boyd, Minister of the Economy, is a cornerstone of that province's deliberate focus on supporting innovative solutions to enhance oil recovery from the vast Western Canadian Sedimentary Basin, the major conventional oil producing region spanning three Western provinces in Canada.

The evolution of this innovative capability was primarily driven by Harvest Operations Corp. ("Harvest"), a key player in the Western Canadian oil industry. Harvest is representative of the majority of producers in this region, which face an ongoing challenge in production of conventional oil - that of being able to cost effectively measure the amount of oil produced at the well head in high water cut oil wells. As wells mature they produce less and less oil and more and more water. The majority of mature conventional oil wells produce fluids that contain less than 5 percent oil - with some producing 100 percent water and no oil. Removing the "water producers" saves the production and water handling costs associated with those wells and frees battery capacity to take on suspended wells that were taken offline in times of lower prices.

ESI's core intellectual property will be significantly enhanced by the collaborative contributions of its partners in this operationally-focused technology commercialization effort.

The Saskatchewan Research Council, a highly respected petroleum research, development and demonstration institution in Canada, will provide the intensive operational test and evaluation of the sensor technology required not only for finalization of the sensor capability, but its ultimate deployment by the oil industry in Canada and beyond.

Harvest will provide the facilities for field trial of the technology throughout its commercialization phase, the expertise of its reservoir and production engineering teams in optimizing the capability to actual operational conditions, and the critical role of first adopters of the finished sensor.

Dycor Technologies Ltd., with its extensive network of clients for instrumentation technology solutions in the North American oil industry, will contribute design engineering, manufacturing, and broad market penetration in support of this technical innovation. Mark Marsden, CEO of Dycor, indicated, "Our extensive research of currently-available capability in oil and water cut sensor technology has convinced us that ESI's unique technology and practical approach is the clear and obvious solution to the high water cut challenge facing the industry today".

This cooperative partnership, which will include funding of this multimillion dollar initiative, is expected to provide all the support necessary for the sensor's readiness for field trials scheduled for 2015, with full operational deployment thereafter.

Stephan Radermacher, Chairman and CEO of ESI, stated, "We could not have conceived of a more practical and efficient partnership - bringing together a leading Canadian governmental research organization, the pull of a key industry partner, a design and engineering partner with extensive commercial linkages into our target market, and the intellectual property resident in the people of ESI - to have a lasting and profitable impact on both production and environmental stewardship in the international petroleum sector."

About ESI

ESI is a leading manufacturer of patented and proprietary solutions for environments where understanding the presence, movement, and/or amount of water are important. Major market sectors include: agriculture, golf and turf, scientific research, civil engineering and crude oil production. ESI solutions have been successfully introduced into more than 40 countries to enable customers to optimize their operations by monitoring the presence and movement of water, managing irrigation systems, and monitoring the integrity of landfill covers. The Company's Flo·Point™ instrument was designed for the oil industry to measure the volumetric presence of water pumped during crude oil extraction for characterization and optimization of the process. ESI differentiates itself by translating the best technology and science available into practical, easy to use solutions. Irrigation managers, Reservoir Engineers, and Scientists have adopted ESI's products for their accuracy, ease of use, repeatability, and ability to operate in challenging environments. ESI is publicly traded on the TSX Venture Exchange under the symbol "ESV". Further information about ESI may be obtained through the Company's website at www.esica.com.

On behalf of the Company:

Bernard Beauchesne

Chief Operating Officer


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