Lux Research spoke with Latitude Solutions’ Director of Financial Relations, Virginia Dadey, about the recent major shakeup there that saw the replacement of CEO Harvey Kaye and COO Ray Harlow. Industry veteran Jeffrey Wohler is the new acting president.

Latitude is one of the many startup water treatment companies competing for the rapidly evolving shale gas frack flowback and produced water market. As we noted in our recent profile (Client registration required), Latitude’s ongoing manufacturing partnership with Jabil Circuit makes it unusually well-positioned for strong growth. Apparently, however, sales weren’t flowing in to match capacity.

With inventory stacking up, the board decided new leadership and a new, more flexible sales cycle were both in order. Dadey says, for instance, that the company had insisted on one- to two-year contracts for its services, but is now content with contracts as short as six months to get its technology in front of customers and prove its capability.

Latitude isn’t the only company that is finding itself in a buyer’s market. With U.S. gas prices at rock bottom, significant numbers of well operators are saving money by reusing flowback water for new fracks with little or no treatment, regardless of fears the filthy water will reduce well productivity. Increasingly, tech suppliers are touting the usefulness of their products outside oil and gas – Latitude itself has looked into the food and beverage industry, among others. But the company is convinced it’s sitting on a disruptive technology, and is determined to sell it into the unconventional oil and gas industry. With some units already in the gas fields and a newly announced West Texas Permian Basin contract with an unnamed “top tier oil and gas company”, it remains to be seen whether Latitude can gain traction against the likes of the already profitable – if perhaps more conventional – WaterTectonics/Halliburton combination and the many other would-be water service suppliers selling every conceivable method of treating highly contaminated brine. Investors should use extreme caution investing in this field, but pay attention to the evolving technology. With so many innovative players, some really interesting water treatment technologies may become available at bargain prices.

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