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.