STW Resources Holding Corp. obtained approval from the Middle Pecos Groundwater District to drill an additional development water well to further define the extent of the water contained in the aquifer. Test wells studied by a recent hydrogeological report show potential production of 100+ million gallons per day for up to 100+ years.

STW will drill and complete all of the production wells and run their own flow rates along with other criteria to determine the parameters of the reservoir with the assistance of a certified Hydrogeological Firm that specializes in evaluating water reservoirs and how much water is actually contained in them. The project is on schedule currently and with the high production rates of water from the monitor well, STW is encouraged, thus the acceleration of its well development program. STW is moving forward on the project financing part of the project to move the project even faster along.

The property currently has a monitor well that was drilled in 2013 to a depth of 3,500 feet. It contains approximately 500 feet of Capitan Reef Formation and is currently producing approximately 300 gallons per minute or 432,000 gallons of water per day. Pursuant to information derived from other wells in the area that have been drilled through the Capitan Reef, there should be an additional 500-800+ feet of Capitan Reef Formation.

The current development well being drilled by STW, utilizing the monitor well water, will be drilled to the bottom of the Capitan Reef Formation to determine the extent of the reservoir. It is currently drilling at 1,200 feet. If the additional footage of reservoir is proven, this development well should produce two to four+ times the volume of water that the monitor well is producing or approximately 1-1.6+ million gallons of water per day.

STW is also increasing the diameter of the hole drilled into the formation which should increase the flow rates of the water. This project is pursuant to the signing of a lease agreement with Ft. Stockton last summer on municipal land to drill multiple water wells to produce and market water from the Capitan Reef Water Aquifer to other municipalities in West Texas.

Texas is still in a severe drought stage and many of the towns that the STW water pipeline will serve are close to running out of water for their citizens. The Capitan Reef Water will also be sold to end users for drilling oil & gas wells instead of using precious fresh water in the drought stricken areas. The company holds the right to sell water contracts to beneficial users for up to 30 years or the life of the contracts agreed upon.

The project is divided into three phases with the initial phase cost at approximately $18 million; the company is currently negotiating terms with investors for partnering and/or financing. Initially, STW and the city of Ft. Stockton have agreed to build multiple water stations to provide water for industrial customers.

Simultaneously the company is contracting a 189-mile pipeline through the Permian Basin in West Texas to provide water to 9 communities. Water will be sold and transported through the pipeline during construction to towns and beneficial end users along the route.