Wavefront Technology Solutions Inc., a fluid injection technology company, said it has renewed for another year its deal for Powerwave distribution with local partner in Saudi Arabia.
Under the terms of the agreement, the distributor and Wavefront have agreed to a minimum aggregate amount of approximately US$1 million for the exclusive rights to Wavefront’s Powerwave Odyssey tool that helps with well stimulation.
The company accounts for its revenue contracts using the percentage of completion method, which is based on the time of the tool rental and the underlying technology’s licensing term.
Wavefront said that revenues will be recognised when the Powerwave Odyssey or self-adjusting nozzle job is known or at the end of the company’s quarter, if minimum quarterly thresholds are not met.
Estimated revenue is updated to reflect the amount of consideration the company expects to be entitled to in exchange for providing services and technology, and is affected by various uncertainties that depend on the outcome of future events, including amongst other things foreign exchange and foreign tax withholding rates. In providing its tools and technology to this distributor, Wavefront will recognize revenue in the net amount to be received.
Wavefront will continue to provide marketing and technical support and will work with the Distributor and end user to provide additional Wavefront technology for enhanced milling/drilling operations as well as new, integrated solutions to well stimulation.
“We are very pleased to continue with the successful relationship we have established with our Distributor in the Kingdom of Saudi Arabia who has quickly risen to be a revered, industry-leading service provider in the Middle East North Africa region,” said Wavefront President and CEO Brett Davidson. “This Agreement represents a continuation of the Company’s strategy to strongly concentrate on single well stimulation and related services in the Middle East with respected and well positioned coiled tubing service providers who can effectively deliver Wavefront’s suite of technology to their respective customers.”