Question-and-Answer Session
Operator
(Operator's instruction) Your next question comes from the line of William Holstein - B&H Group LLC.
William Holstein - B&H Group LLC
It sounds like you are making some progress here. The one thing I took away from this conference call is that you have really decided that you are going to focus on the diesel market initially that that is where the sweet spot for this technology is, that is correct?
Larry Ryan, Ph.D.
Yes.
William Holstein - B&H Group LLC
Okay, then let us talk a little bit about the economies that you had always in the past we have talked about the economics of crude oil.
Larry Ryan, Ph.D.
Sure.
William Holstein - B&H Group LLC
And I noticed some in graph that is more showed us the one crude oil you adjusted was 36.3 API which is a little bit higher API than we had originally talked about to. So, it kind of I know you are still evaluating the economics but give us some idea of what the cost is, how much additive do you need, what is the 70% or 75% reduction in the sulfur, give us as far as potential profit for the customer and just walk us through that really quickly. Where you sense that seems the new focus of the Company.
Larry Ryan, Ph.D.
Well, sure. First of all, let me just make a statement that may not be obvious to most folks. I mean the original technology and pad for the Company obviously were around the treatment of diesel fuel and also that in sulfur comp and all the diesel fuel. So, in some sense, what is really happened over time is that as we develop the technology and started to optimize the probe and the chemistry associated with this, of course, you might guess diesel fuel applications tend to the be ones that migrate to the top and part of the reason for that is that it is a relatively fine item on a sulfur that is present in those streams and from a, clean is the wrong word but let us say from a characterization standpoint, they are a cleaner stream to deal with. Crude oil of course has contained a lot more components.
In terms of the economics, Bill, what I can tell you is that the cost of the process is linked to the amount of sulfur that you want to remove. What I can also tell you is that, and I am going to give you sort of a consulting answer, that the benefits depend and they depend on a number of factors that are really specific to the applications. So, let us walk through of few to give you some numbers. I think in our investor presentation that is online, there is some assessment of the diesel market at least the page where it gives you an idea of the spread between let us say ultra low sulfur diesel and then other grade of diesel and if you go through that, it is in the cents per gallon and when you do all the math, it is on the order of anywhere from $2 to $5 a barrel benefit if you are going to look at the commercial spread for those so that is a, it is not exactly let us say the range of potential benefit is somewhere in that range and our cost to treat those types of streams based upon where we are today in terms of the materials we need to use is extremely cost effective in that regime, okay. So, it is something that we understand pretty well.
- To read the full transcript on Seeking Alpha, click here »
