Intercept Energy Fleet Advances Into North Dakota

| Source: Intercept Energy Services Inc.

VANCOUVER, British Columbia, March 3, 2014 (GLOBE NEWSWIRE) -- In the gold rush of 1840s, a German immigrant named Levi Strauss got rich supplying miners with denim overalls. Investment historians insist that equipment suppliers (picks & shovels) made more money from the California gold rush than the miners.

Intercept Energy Services (TSX-V:IES) operates a fleet of trucks that supply super-heated water to the rapidly growing North American fracking industry.

The IES trucks use proprietary technology making the water heating units the most safe, economical and environmentally friendly available. For the last two years, IES has been servicing oilfield and gas companies in Western Canada.

On January 29, 2014, Intercept Energy deployed two new trucks to North Dakota, where the fracking oil & gas boom has reduced unemployment to 3.5% and created a $1 billion-dollar state budget surplus.

Ten thousand fracking wells open up each year in the U.S. creating a growth opportunity for "picks and shovels" suppliers like Intercept Energy.

Randy Hayward, Intercept Energy CEO, has spent 25 years doing fund raising, corporate development and strategic planning for a variety of public and private companies.

"Intercept Energy was formed in 1995 as a junior capital pool company trading on the TSX-Venture Exchange," states Hayward, "We've created enough revenue and raised enough money to steadily grow the size of our heating truck fleet."  

Lynn Helms, Director of North Dakota's Department of Mineral Resources recently predicted that the State's daily oil production will double – from 875,000 to 1.6 million by 2017. North Dakota also produces over 800 million cubic feet of natural gas daily.  

"Our business is entirely harnessed to the fracking industry," confirms Hayward, "In Canada most of the drilling activity takes place in the winter months, because the remote northern sites require frozen roads to provide access for the men and machinery."  

Intercept's clients often require water as hot as 60 degrees Celsius. The new IES trucks are installed with 6th generation technology which makes them extremely efficient in all weather conditions. Traditional heating-truck technology may incur heat loss of 50%, compared to Intercept's rate of 1% to 3%.  

"Our heating system generates potentially higher profit margins," states Haywood, "Companies that rely on diesel fuel would likely incur fuel costs three times larger than ours. For obvious reasons we do not like to divulge the technology inside the tank. But suffice to say we have enormous cost efficiencies built into our proprietary technology."  

Intercept's potential customers include big energy companies active in fracking like Shell and Exxon Mobile.

"We are in active discussions with a number of large clients," confirms Hayward, "These relationships take time and patience to establish. Typically a 'Master Service Agreement' will be reviewed, covering issues like safety protocols and cost efficiencies."  

"As we meet with big fracking companies in North Dakota," says Hayward, "We are finding that they are often frustrated with their existing suppliers. There are two areas in which we feel we have a competitive advantage. The first is cost. Our proprietary heating technology allows us to heat water quicker with lower fuel costs."  

"The second advantage is service," explains Hayward, "We have a company policy of only charging for 'heating hours'.   So if it takes 30 minutes to set up the rig - that is our time. Our clients appreciate this. Just yesterday, an operations manager told me, 'you wouldn't believe how many companies start billing from the moment the truck rolls onto the site – we think it's unfair and we are looking to grow our business with well-run companies that have honest and transparent billing policies.'"  

For a supplier like Intercept Energy, it is vital to be surfing a wave that is pushed by economic necessity and political will.  

"Abundant low-cost energy is stimulating a revival of manufacturing in the U.S." states Daniel Yergin, a Pulitzer Prize winning author and Chairman of Cambridge Energy Research Associates (CERA).  

According to Yergin, shale gas extraction could support 4 million jobs by 2020. By this time, the U.S. is expected to pass Saudi Arabia as the world's biggest oil exporter. At the current rate of production growth, natural gas will to overtake coal as the second largest source of energy worldwide by 2025.

On December 13, 2013 – IES closed a non-brokered private placement at a price of $.075 per share, receiving gross proceeds of $656,750 for the purchase of 8,756,666 shares in two separate tranches. IES intends to use the proceeds to purchase additional water heating units and for general working capital.

Hayward's goal is to generate at least $100,000 a month per-truck average throughout the year ($1.2 million per year). The payback time for each unit is about 18 months at the current revenue generation schedule. 

Intercept Energy is currently trading at .04 with a market cap of $4.9 million.

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Intercept Energy Services Inc.
Suite 600 - 666 Burrard Street
Vancouver, BC, V6C 3P6
Phone: 1 (604) 687-8855