Formation Fluid Management Inc.
TSX VENTURE : FFM

Formation Fluid Management Inc.

July 16, 2015 12:28 ET

Formation Fluid Announces Amalgamation and Provides Update

Formation Fluid Management Inc. Announces Short-Form Amalgamation With Wholly-Owned Subsidiary and Operations Update

CALGARY, ALBERTA--(Marketwired - July 16, 2015) - Formation Fluid Management Inc. ("FFM" or the "Company") (TSX VENTURE:FFM) is pleased to announce that, in order to simplify the corporate structure of FFM and to reduce administrative costs, effective July 1, 2015, it has completed a vertical short-form amalgamation pursuant to the Business Corporations Act (British Columbia) with its wholly-owned subsidiary, Formation Fluid Technologies Inc. ("FFT"). Pursuant to the amalgamation, all of the issued and outstanding shares of FFT will be cancelled and the assets, obligations and liabilities of FFT will be assumed by FFM. No securities of FFM will be issued in connection with the amalgamation and the share capital of FFM will remain unchanged. The amalgamation will not have any significant effect on the business and operations of FFM. The combined company has assumed the name of Formation Fluid Technology Inc. and will continue to trade under the symbol FFM on the TSX.V exchange.

Cost Saving Initiatives

The company instituted a 20% salary and wage rollback effective June 1, 2015. This reduction is a result of lower than anticipated activity levels attributable to the decrease in oil prices which has effected cash flow and activity levels for oil and gas companies.

Business Outlook

The Company is seeing increased opportunities as a result of the following factors:

  • Lower than average water levels throughout Western Canada have resulted in Oil and Gas Companies looking for alternate sources of water as conventional sources have declined with the drought conditions;
  • Existing industry regulations do not anticipate technology like the Hydro Cycle. Extensive demonstration of the technology to the regulatory agencies now have the regulators supportive of initiatives to clean water for re-use and working with FFT and exploration and production companies to ensure water cleaning projects proceed;
  • The industry's continued focus on contaminated water issues is providing the company with expanding market opportunities to provide water for fracs, water floods, polymer floods, and SAGD operations;
  • Proposals to clean water at waste disposal sites have been submitted to a deep well disposal company to recycle and reuse the water normally injected. Also proposals to recycle water at; a producing well site, a drill site and a frac flow back location have been accepted by several major producers. These projects are anticipated to proceed using the Hydro-Cycle system;
  • The oil and gas industry is focusing on ways to reduce costs. The Hydro-Cycle system can clean produced water for re-use, recycling or release in oilfield operations and this can save money and conserve surface water for other uses;
  • Oil and Gas Companies are refocusing their efforts on ways to cuts costs and save money. This has been detrimental to the Company in the short term as projects have been delayed. The Company believes that in the long term this focus on costs will ultimately be to its benefit particularly when it is demonstrated that the FFT Hydro-Cycle system can save oil companies in excess of 50% on their water management program costs. The silver lining of the industry downturn is that companies now have the time and the incentive to look at cost saving technologies like the Hydro-Cycle system.

About Formation Fluids

Formation Fluid Technology has developed a three stage waste water treatment plant (Hydro-Cycle) that uses a proprietary process to clean waste water. Each plant is mobile and can process up to 1000 m3 of water per day. This system treats water to meet or exceed CCME Guidelines (Canadian Environmental Quality Guidelines), resulting in reusable water that can be used for: Boilers, Frac Water, Water Floods, and Drilling Operations. Formation Fluids has identified commercial applications for the Hydro-Cycle system within the oil and gas industry. The waste water treatment system has a primary use to reduce producers' costs of dealing with produced water. The system also satisfies the need to reuse and recycle an increasing valuable resource. For more information, please visit: www.fftinc.com or contact Investor Relations at 403 887-8874.

Ken Rose, Chief Executive Officer

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain statements contained in this news release, including references to the Company's receipt of applicable approvals, may constitute forward-looking information under applicable Canadian securities legislation. These statements relate to future events and are prospective in nature. All statements other than statements of historical fact may constitute forward-looking statements or contain forward-looking information. Forward-looking statements are often, but not always, identified by the use of words such as "may", "will", "project", "predict", "potential", "plan", "continue", "estimate", "expect", "targeting", "intend", "could", "might", "seek", "anticipate", "should", "believe" or variations thereof. Forward-looking information may relate to management's future outlook and anticipated events or results and may include statements or information regarding the future plans or prospects of the Company. Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements. The Company believes that the expectations reflected in the forward-looking statements contained in this news release are reasonable, but no assurance can be given that they will prove to be correct. Actual results and future events may differ materially from those anticipated and accordingly forward-looking statements should not be unduly relied upon. Forward-looking statements contained in this document speak only as of the date of this news release. Except as required by applicable law, the Company disclaims any obligation to update any forward-looking information.

Contact Information

  • Investor Inquiries: 1 (403) 887-8874
    E-mail inquiries: info@fftinc.ca