SOURCE: Lithium Exploration Group, Inc.
SCOTTSDALE, AZ--(Marketwired - Mar 7, 2014) - Lithium Exploration Group Inc. (OTCQB: LEXG) CEO addresses shareholders with his monthly newsletter:
Last month began with the successful testing of the ultrasonic generator unit in Houston. The same day that the testing was taking place, we received notification that our Morinville facility had been upgraded from Class 2 to limited Class 1b. So February started out pretty well.
The following week, the Morinville facility was upgraded to limited Class 1a status, with full Class 1b status. This means we are able to market a significantly expanded suite of disposal options to potential customers, and all of these additional options command higher pricing than standard Class 2 produced water.
Two weeks ago, there happened to be a diesel spill on a highway in the region requiring the disposal of thousands of tons of contaminated water and, as a local site with our newfound regulatory approvals, we were ready to fill that order. Then last week we got another call from a new customer with a significant amount of high dollar waste needing a home. Our new approvals allow us to take it. Six weeks ago, we would have had to turn all of these opportunities away.
Without the final numbers in, I hesitate to discuss exact amounts but I feel comfortable saying that in the month of March alone we will achieve more revenue than we projected for the first six months of 2014. We intentionally modeled only a Class 2 revenue stream for the first six months of 2014 and have set a cap on the amount of fluid we are willing to dispose at Morinville until we get six months of injectivity pressure testing. We think of this well as a gold mine and want to ensure that we treat it properly so that it can produce revenue for us for decades to come. If we get too aggressive too soon, we run the risk of damaging the integrity of the formation and the well.
We spent the last ten days of February rounding up the required capital to close on the transaction to purchase 50% of the outstanding shares of Tero Oilfield Services. We have spent the past six months working with the management of Tero to improve some operational performance metrics which have gone very well. Their books are not yet GAAP compliant so unfortunately I cannot discuss their 2013 financial performance but I can say that we are extremely excited to have completed this transaction.
Tero Oilfield Services is a Class 1b liquid disposal and solid waste processing facility. One of the plans that we have made with our partners is to expand their facility to offer custom treating of oil (treating producer's oil to make it pipeline-ready) for some of the smaller operators in their addressable market. They have already taken steps to begin this process with a few of their customers and, after a few months of this "custom treating trial," we will make a decision regarding the prospects of expanding the facility to accept larger volumes. Tero has a great team on site and we believe that, with a little bit of help from our team at Alta Disposal, this facility can be a considerable thorn in the side of the larger competition in the area.
Financially we have assembled a team of people in Calgary and a set of assets (Morinville and Tero) that will allow us to operate profitably on a go forward basis while we wait for the technology to be field-tested and prepared for mass distribution; but I don't see us resting on our laurels at this stage in the game.
- We will be looking at more acquisitions of disposal facilities with the following criteria:
- That we can provide needed back office support from Calgary (bookkeeping, production accounting, regulatory and safety programs, etc.).
- That we can improve revenue via sales and marketing efforts of our own.
- That we can assist in adding additional product offerings to their clientele.
- We will continue to develop the strategy for extraction of lithium, potassium, magnesium and other industrial minerals from oilfield brine. Timing will be dependent on the deployment of the technology to the field and performance results but there certainly is work that we can begin now to prepare for a bench scale test of our separation technique.
- We are already looking at the distribution of additional technologies that are trying to find a home in the Western Canadian energy ecosystem. We will add these products to the "technology distribution" arm of the business (to go along with the distribution rights we have in Canada for the ultrasonic generator). These technologies need some field testing which we can provide at our disposal facilities and they need a talented sales force to manage the strategy and deployment.
- We are going to get into the production side of the oil and gas industry. It is just a matter of when and where. We are not actively looking for assets but if we find the right asset with the right management team, we will not hesitate to pull the trigger on an acquisition.
We feel pretty excited about the growth opportunity that we have in front of us and I thank you all for the opportunity to serve as your Chief Executive. We have so many things going on right now that I will be distributing a letter of this kind in the first week of every month for the foreseeable future.
Lithium Exploration Group, Inc.
About Lithium Exploration Group
Lithium Exploration Group is a US-based exploration and development company focused on the acquisition and development potential of lithium brines and other precious metals that demonstrate high probability for near-term production. Currently the company is focused on its Western Canada lithium assets, testing its Ultrasonic Generator Technology and the acquisition of oil and gas related assets in Western Canada. Lithium Exploration Group is a fully reporting company traded on the OTCQB under the symbol LEXG. Website: www.lithiumexplorationgroup.com.
Safe Harbor Statement
This news release contains "forward-looking statements." Statements in this press release that are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future testing of the ultrasonic technology.
Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with mineral exploration and difficulties associated with obtaining financing on acceptable terms. We are not in control of lithium prices and these could vary to make development uneconomic. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements.
Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our most recent annual report for our last fiscal year, our quarterly reports, and other periodic reports filed from time-to-time with the Securities and Exchange Commission.