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Water treatment minnow MyCelx can clean up with oil giants

Challenge: Chief executive Connie Mixon

Oil and gas companies spend billions of pounds cleaning water each year, not just after environmental disasters but every single day. The process is cumbersome, expensive and often inefficient.

Now there is an alternative – a small US-based company called MyCelx Technologies Corporation has devised a way to remove oil from water far more effectively than traditional methods.

The firm joined AIM only two years ago but already numbers some of the world’s biggest oil companies as clients. The shares closed at 470p on Friday and will almost certainly move higher over the next few years.

Whenever companies drill for oil, it comes to the surface mixed with water. In days gone by, they would put the water through a rudimentary cleaning process before returning it to the sea or ground.

However, regulations have become increasingly stringent. Other cleaning methods are available, but none is as thorough as MyCelx’s. The company’s kit is also much smaller and lighter than that of competitors, so it is ideal for deep-water exploration, where rigs are designed to be as compact as possible. The room-sized system draws the oil out of the water by using a chemical that binds with the oil molecules.

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Deep-water projects also produce around 100,000 barrels of water each day on each rig, which is three times more than conventional offshore methods. This amount requires intense filtration and MyCelx can provide it more efficiently than rivals and more cost-effectively.

...but blood is thicker for a family affair

MyCelx chief executive Connie Mixon took the helm in 2004. A banker by profession, she knew a fair bit about MyCelx because her father, American oil magnate John Mansfield, had founded it ten years previously.

Having spent almost two decades in investment banking, Mixon was becoming rather bored, so her father suggested a new challenge at MyCelx. She liked the look of the business, joined the board and soon became  the boss.

The firm has since gone from strength to strength, so much so that, in 2010, Connie recruited her husband, Mark,  as chief business development officer.

He had previously been chief  sales manager at Mansfield Oil, his father-in-law’s business.

Clearly, the Mansfield/Mixon clan  like to keep things in the family.

The MyCelx kit is used onshore as well and the company is even working with a university in Texas to create a process allowing water released during oil production to be used in agriculture.

Oil refineries and petrochemical plants also use MyCelx equipment to clean the water they use in  their production processes.

In the Middle East, for example, companies buy water to use in the oil refining process and then send it to central cleaning plants before it can be re-used. With MyCelx kit, they can do it all on site, saving a fortune each year.

The company was founded in the 1990s by US inventor Hal Alper and oil magnate John Mansfield, who spent about eight years perfecting the technology before launching it.

The oil industry is conservative and slow to take up new technology, but MyCelx customers already include BP, Chevron and Saudi petrochemical giant SABIC.

The firm is growing fast. In 2011, sales were $6.3million (£4.1million). They were $12.3million last year and they are expected almost to double again this year to $23.2million, rising to more than $50million by 2015.

The group is also expected to move into profit this year, with a pre-tax figure of $1.6million, soaring to almost $10 million in two years’ time.

MyCelx is based in Georgia but is chaired by former UK Energy Minister Tim Eggar, who has almost 30 years’ experience in oil and gas.

Eggar joined MyCelx just before it floated and his appointment was widely seen as a vote of confidence in the firm.

Midas verdict: MyCelx shares are 470p and have done well since flotation. However there is plenty more mileage in this stock. Buy.

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