STW Resources To Acquire Black Pearl Energy, LLC

MIDLAND, Texas, Sept. 9, 2014 /PRNewswire/ -- STW Resources Holding Corp. (OTC QB: STWS) announced today its planned acquisition of a locally owned Midland based company, Black Pearl Energy, LLC ("Black Pearl") that installs liners and has introduced floating evaporation covers for fresh water frac pits to the oil industry. Black Pearl has been in business for 4 years operating primarily in the Permian Basin where it has established a broad customer base and reputation for quality. Black Pearl's synergies with STW are throughout most divisions and will immediately be accretive to the company's revenues. STW Resources plans to operate Black Pearl as a wholly owned subsidiary.

In a non-binding agreement signed Thursday, STW will pay $1.95 million for 100% of Black Pearl. The parties are working on a definitive agreement and expect to close the transaction by the end of September 2014. STW will pay the purchase price as follows: 21% cash, 37% earn-out over three years and 42% in stock (priced at $0.30 per share). The transaction is subject to customary closing conditions, including availability of audited financials for Black Pearl, and therefore it is possible that the transaction may not occur by the end of September or at all. 

In 2013, Black Pearl's revenues were $6.4 million with net cash flow of approximately $750,000. For the period ending June 30, 2014, Black Pearl's revenues are tracking at $5.5 million, an annualized increase of approximately 67% over 2013 revenues.  STW believes through their integration of the Black Pearl operations, revenues will track an aggressive growth rate and net margins can be significantly increased. On closing of the acquisition, STW will file audited Black Pearl financials for two years and pro-forma financials demonstrating consolidated balance sheets and statements of operations.

STW COO Joshua Brooks stated, "Black Pearl will be operating under new management; however, we anticipate a smooth transition as we have been preparing for this acquisition and integrating STW personnel and operations in many of the liner and cover projects over the last several months."

STW CEO Stanley Weiner added,  " Black Pearl is a valuable addition to our suite of services and our plan for STW's continued growth of water conservation activities. The evaporation covers completely prevent any evaporation of water from the ponds which is quite a lot out here in west Texas with the dry winds and high temperatures. The liners keep the water from soaking into the dry ground. Both have a direct impact on water usage and help conserve our precious fresh water resources".

STW CFO Robert Miranda stated, "STW's acquisition of Black Pearl will be accretive in revenues, profitability, and cash flows.  Expense reductions are expected from the integration of management, operations, sales and administrative functions."

About STW Resources Holding Corp.

STW Resources Holdings Corp. consults and provides customized water analysis, reclamation and remediation services to a variety of complex oil and gas produced and flowback water, brackish water, industrial, and municipal applications throughout several geographic locations. As an independent solutions provider, STW utilizes proven technologies from various well-known manufacturers. These technologies are available as fixed or mobile units with varying capabilities. STW's process ensures that the most effective and efficient technologies are implemented. Current potential project locations include the Eagle Ford Shale (TX), the west Texas Delaware and Permian Basins (TX), and eastern New Mexico.  STW is also involved in the oilfield construction, providing road, pit, location, and water pond construction. It also offers evaporation covers for the elimination of evaporation on frac ponds used throughout the oilfield.  Evaporation causes the operators millions of dollars in losses annually. Covering the ponds is a conservational and economic method of preserving one of our natural resources and can be floated on to existing ponds or installed during construction.  It also eliminates algae growth, doubles as a bird net, and reduces erosion of pond infrastructure. High quality liners with fusion-welded seams, quality control testing including air tests of seams and destruction testing are also standard. STW Energy, a subsidiary of STW Holding Corp, offers a turnkey rig washing service and STW Holdings offers the ability and technology to process drilling waste fluids, tank bottoms, and oil based cuttings that will completely eliminate any potential future liabilities (Cradle-to-Grave) to the operators after they dispose of them. STW services include roustabout services for several major oil and gas producers too. STW's Pipeline Maintenance & Construction division aids oil & gas companies in connecting new wells so the oil & gas can be sold to market and helps maintain the integrity of their existing pipeline infrastructure.

www.stwresources.com

About Black Pearl Energy, LLC

Black Pearl information

Black Pearl Energy, LLC, a Texas limited liability company, located in Midland, Texas introduced a major and effective solution to a long-standing problem throughout the Texas oil industry.  In the midst of one of the worst droughts in Texas history and ongoing water concerns, Black Pearl designed and engineered a solution to help conserve one of our most important resources… Fresh Water. Black Pearl introduced a floating cover for fresh water frac pits that is engineered with a sophisticated arrangement of integrated floats and weighted ballasts that allows it to rise and fall with the different levels of water in the pit and also keeps it intact during the high west Texas winds. It eliminates evaporation and as a side benefit controls algae growth and doubles as a bird barrier. It helps conserve fresh water resources.

Forward-Looking Statements

This news release contains forward-looking statements about our business, or financial condition and prospects that reflect our assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. There may be other risks and circumstances that we are unable to predict. When used in this news release, words such as "believes," "expects," "intends," "plans," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including risks discussed in the company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.

SOURCE STW Resources Holding Corp.