Energy Recovery sells exclusivity rights to Schlumberger

Energy Recovery has sold the exclusive rights to manufacture and operate its VorTeq hydraulic fracturing technology for the next 15 years to engineering firm, Schlumberger in a deal that immediately tripled the energy from pressure firm's share price.

The deal includes a US$ 125 million exclusivity fee. Energy Recovery's annual revenues from its desalination pumps have averaged about US$ 45 million.

The exclusivity fee will be paid in an upfront US$ 75 million tranche paid this year followed by two US$ 25 million as yet unspecified milestone payments expected by ERII next year. The payments are purely for the exclusivity arrangement and none of them have any associated operating costs.

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