Global Resource Corporation has provided additional details regarding the company's joint development agreement (JDA) with Schlumberger.
Originally disclosed on April 28, 2009 via an 8-K SEC filing, the comprehensive JDA provides for a collaborative arrangement between Global Heavy Oil Corporation, a wholly-owned subsidiary of Global Resource, and Schlumberger. The JDA provides for a three phased approach with the goal of creating commercial applications/products by utilizing both companies' microwave processing technologies.
"Our work and research with Schlumberger is a milestone agreement for Global Resource Corporation and illustrates the potential of our technology for a number of industries, and in this instance specifically the heavy oil resource industry," said Peter Worthington, Chief Executive Officer of Global Resource Corporation. "We are confident that the successful outcome of this collaboration will be a series of high value, oilfield service products. These products will then likely be sold through Schlumberger's existing business model to companies in the oil and gas exploration and production industries. All activity will take place under a mutually beneficial agreement that leverages both companies' technologies, capabilities and sales channels, and ultimately creates new revenue flows."
Under the JDA, Phase 1 will focus on research and development and identifying specific applications that either reduce costs or increase the value of heavy oil. Heavy oil, being hydrocarbons having an API gravity below 23.4 degrees, form over 70% of the world's known hydrocarbon resources. Phase 1 will run for up to 2 years although a much shorter period is anticipated. In Phase 2, the collaboration will develop one or more prototypes based on the findings of Phase 1. Finally, Phase 3 will center on the commercialization and sale of the resulting applications/products for heavy oil processing.
Work and research under Phase 1 of the agreement has already begun, with an Oversight and Technical Steering Committee already in place and operational. Under terms of the agreement, Global Resource has already received a payment of $600,000 from Schlumberger for Phase 1, with another $1 million payable at the inception of Phase 2. Depending on the ultimate patent portfolio, Schlumberger will allow a joint venture credit of up to $8 million to GBRC.
The resulting joint venture commercialization revenues will be shared by the two companies with 60% going to Schlumberger and 40% to Global Resource.
Worthington concluded, "This joint venture is a natural collaboration for both us and Schlumberger. It combines our innovative technology for processing energy rich feedstock, like heavy oil, with a truly global partner's technological expertise in upstream oil and gas processing and existing sales channels. We are confident the result will be cost effective and environmentally positive solutions for the oil and gas industry."
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