STWA is a developer of energy efficient technologies for the multi-billion dollar oil pipeline and diesel engine markets. Applied Oil Technology (AOT™) is a patented method and apparatus designed to help crude oil pipelines operate more efficiently and increase their daily throughput capacity by using a process to reduce the viscosity of oil travelling through the pipeline. In testing completed last year by the US Department of Energy under real world conditions, AOT™ was found to increase pipeline efficiencies by more than 13 percent.
The company recently announced that it has signed a new five-year operating agreement with the US Department of Energy's Rocky Mountain Oilfield Testing Center (RMOTC). This five-year agreement extends through the end of 2016.
Cecil Bond Kyte, STWA Chairman and CEO, explained the objective of the agreement. He said, "By continuing our collaboration with the United States Department of Energy and field testing our technologies at the Rocky Mountain Oilfield Testing Center, we validate the effectiveness of our technology for the key decision makers in both industry and government.”
Previous testing showed that AOT operations improves the energy efficiency of the pipeline by over 13%. The company is incorporating the results of those tests into new designs and this agreement will allow for further testing under the same conditions. This will make it possible to directly measure the impact of design changes.
According to our research, China is the #1 growth market by a long shot. China's demand is growing by 1.1 Million barrels per day per year and China accounts for 40% of all world oil demand growth! Results from testing previously completed at the RMOTC have helped STWA open talks with oil companies in China. As economies continue to develop and grow around the world, the use of oil continues to grow and that means the need for pipelines will continue to expand. STWA is well positioned to take advantage of this trend.
AOT™ allows pipeline operators to temporarily reduce the viscosity of the crude oil moving through a pipeline to reduce the fluid-drag (which is also called friction-loss) between the fluid and the pipeline. By reducing the friction loss, pipeline operators' pump systems require less energy to maintain a constant flow rate, and this leads directly to lower daily operating costs.
The stock price of the company has doubled from the 52-week low. ZERO fell as the market declined over the summer but has significantly outperformed the market since the recovery began. According to the independent web site barchart.com, ZERO is rated as a long-term buy based on technical analysis.