Acorn Energy Inc. (ticker: ACFN) is a multi-faceted holding company with four portfolio companies focused on underwater security solutions, power generation and delivery, and fiber optic sensing solutions. US Seismic Systems, Inc. (USSI) is focused on increasing oil and gas production while decreasing costs through the use of its fiber optic equipment.
Off the Starting Blocks
Fiber optics is a niche business in the oil and gas industry. USSI provides new solutions for its customers in the exploration and production segment by offering new sensors to replace the traditional electronic based sensors. The typical old sensors may be as much as 50 years old, and Acorn says less than 3% of the 20,000 annual hydraulic fracturing jobs in the United States are monitored. The company says the increased knowledge of the subsurface can increase the recovery average by as much as 25% and assist in drilling designs.
With domestic production continuing to rise, Acorn believes the development of USSI will fit perfectly into the shifting market.
“While not yet commercial, US Seismic is leading the effort in moving the seismic industry from the electronic world to the photonic world,” said John Moore, President and Chief Executive Officer of Acorn Energy, in the company’s Q2’14 conference call. “We believe we have a commanding lead which is extremely valuable.”
The company expects USSI to generate its first revenue in the second half of 2014 and listed $2.5 million in backlog in its Q2’14 release. Future interest is expected to be generated from 4D reservoir and shale gas monitoring systems.
Source: ACFN October Presentation
Former DuPont CEO Joins the Board
Drilling efficiency through state of the art fiber optics can also reduce the environmental impact. ACFN’s attention to the environment is backed by the recent appointment of Edgar S. Woolard, Jr. to the Board of Directors.
Woolard brings a breadth of experience and expertise to Acorn Energy. He served as Chairman and Chief Executive Officer of DuPont (ticker: DD), a global chemical company, from 1989 to 1995. He remained as Chairman through 1997. During his tenure, DuPont reduced emissions and hazardous waste by 60% and 46%, respectively. His experience on other Boards is extensive, serving with the New York Stock Exchange, Citigroup, IBM and Bell Atlantic. He factored into Steve Jobs’ decision to return to Apple while serving as a director of Apple Computer Inc.
In the press release covering the announcement, Woolard is commended by ACFN management as being one of the first “green” CEOs. : “Acorn’s practical approach to and distinctive technologies for solving critical energy infrastructure problems are compelling and hold great promise,” said Woolard.
Early Results from the “Seismic Shootout”
USSI beat out four competitors in October 2013 to provide orders for a ConocoPhillips (ticker: COP) project in the Eagle Ford, known as the “Seismic Shootout.” Results from the project streamed in throughout the month of October.
USSI deployed its first field services in a hydraulic fracturing job that spanned two weeks and ended on October 27, 2014. Two days later, a hydraulic clamp test was successfully completed at the University of Texas, Devine and will be followed by a high temperature test this November. The clamp, originally designed at the request of ConocoPhillips during the seismic shootout, “Is essential in exploiting the full capability of our sensor system,” said Mark Bashforth, President and Chief Executive Officer of USSI, in a company press release.
The company’s Optiphone HD™ 3C sensor system was validated on location in ConocoPhillips’s Eagle Ford project and in Devine by SR2020, a fiber optic acquisition company with several large-cap clients. COP’s peer reviewed paper said USSI’s sensors are superior to the industry standard and “have an active interest in attempting to image the actual fractures in unconventional reservoirs.”
SR2020 says the advantage is “readily evident, since inside the borehole no digitizing electronics or electrical power is necessary.” The report also says the sensors are ideal for high temperature and high pressure downhole environments – a claim that will be proved within the month. ACFN announced an additional $4.5 million in capital has been raised and will close on approximately November 5, 2014.
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