Letter to Our Shareholders
October 20 2009Dear Shareholder,
Over the last year I have diligently worked with a small team to lower our overhead, minimize costs and counter the effects on RG Global from the declining Gas prices in the US. We have reduced salaries by 40%, outsourcing by over 50% and lowered overall monthly operating costs by over 75%. We have streamlined operations, refined our direction and advanced our technology to the point that we gave it a new name. The potential for our DynIX™ technology has never been greater.
As I am sure you are aware, on October 13, 2009, RG Global entered into an operating agreement for an injection well in Utah. Our original intent was to purchase this Injection Well. Unfortunately time restraints left us with no option other than to find a financial backer whom could immediately acquire the Well, provide us with an operating agreement and make available a future option of purchasing the well. This structure should allow RG Global to generate a positive cash flow while providing long-term stability to our operations.
As I have said before, we have determined that ownership of a deep injection well is the only way to insure corporate profitability and shareholder value in the water processing industry. As state and federal regulations increase, water discharge restrictions result in higher discharge costs. These higher discharge costs pose a threat to the profitability and survival of a water processing company; no matter the benefit of the technology being utilized. This agreement marks the first step in RG Global owning a deep injection well.
While a great deal of time has gone into closing the Injection Well deal, an equal amount of time and effort have gone into developing our presence in Australia. We are currently working on preparations for a seminar showing the benefits of our DynIX™ system and its benefits for treating produced water from Coal Seam Gas (CSG). The seminar will be hosted by World Environmental Solutions Pty Limited (WES). Last May we signed an agreement with WES, to be our exclusive representatives in Australia for utilization of our proprietary DynIX™ Technology in the Coal Seam Gas (CSG) industry. This invitational venue will be directed at the largest CSG operators in Australia who are also the largest CBM operators in the world. This presentation will show the tremendous benefits that Ion Exchange can bring to processing produced water and why the DynIX™ system is the most efficient type of Ion Exchange technology in the market today.
Currently Reverse Osmosis (RO) is the most utilized method of dealing with produced water in Australia. The downside to RO systems is the amount of energy required to run them and the fact that many of the wells are in isolated areas with little to no electricity. To address the lack of available electricity, the industry has begun to utilize mini-turbines that run on CSG gas that is produced from the well. In addition to the large energy requirements, the RO systems produce a waste stream of 20-50%. For many of the areas that are too far from the ocean, this waste must be stored in evaporation pits all over the outback. The Queensland Government is determined to eliminate all of these pits by 2013. With the addition of the DynIX™ process as a pre-filter, to an RO system, we can reduce this waste stream considerably. In addition to the DynIX™ pre-filtration, we can use our crystallization process that utilizes the waste heat, from the turbine generators, to reduce the waste even further.
Australia is currently one of the leading CSG drilling countries spending billions on developing wells, building pipe lines, and LNG conversion facilities. Companies such as Arrow Energy, Santos and Sunshine Gas are expanding their LNG capabilities as a result of increased global demand. Queensland Gas Company, in partnership with British Gas, is planning a multi-billion dollar processing plant to serve this growing demand. With such a demand comes a massive volume of produced water and the need to clean and process this water is of top priority to the producers as well as the Australian government.
The WES seminar will provide RG Global with a one of a kind opportunity to introduce DynIX™ to key personnel responsible for solving produced water issues for the biggest names in the industry. With this seminar, we intend to show how our technology can improve the efficiency of current RO facilities, through the reduction of their waste streams and secure a commitment for a DynIX™ plant in Australia.
As you can see, RG Global appears to have turned the corner and is headed in a direction of security and calculated expansion. With such demand in Australia we are currently considering some reorganizational methods to better serve this market, RG Global and you the Shareholders.
Sincerely,
Grant King
CEO, RG Global
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Background on CSG Gas in Australia
The vast majority of coal seam gas (CSG), as it is know in Australia, is located in the Surat and Bowen Basins in Queensland. It has been estimated that as many as 25,000 wells will be drilled in these areas. The expected annual rate of CSG water production in the Surat Basin alone is 25 gigalitres (GL). The quantity of this highly saline water is considered an environmental risk by the Queensland Government and has given rise to their recent introduction and imposition on gas producers for stringent CSG water management plans and practices. For more information, visit www.RG Global Australia Pty. Ltd.
About RG Global
RG Global is a full service environmental water and wastewater treatment engineering and construction company, headquartered in Southern California. Services include innovative technologies; water and wastewater engineering; construction and construction management; start-up, operation and maintenance services; and equipment manufacturing for industrial and municipal sectors. Areas of expertise include water treatment and distribution; wastewater collection, treatment, and disposal/reclamation. Its multi-disciplinary team includes professional and licensed engineers and scientists with extensive experience in current engineering, environmental, and construction technologies. For more information, visit www.RG Global.us.
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