Specialty Fluids Products Our Specialty Fluids segment produces...

Specialty Fluids Products Our Specialty Fluids segment produces and markets a range of cesium products that include cesium formate brines and other fine cesium chemicals. Cesium formate brines are used as a drilling and completion fluid primarily in high pressure and high temperature oil and gas well construction. Cesium formate products are solids-free, high-density fluids that have a low viscosity, enabling safe and efficient well construction and workover operations. The fluid is resistant to high temperatures, minimizes damage to producing reservoirs and is readily biodegradable in accordance with the testing guidelines set by the Organization for Economic Cooperation and Development. In a majority of applications, cesium formate is blended with other formates or products. Fine cesium chemicals are used across a wide range of industries and applications that include catalysts, doping agents and brazing fluxes. Fine cesium chemicals enable process performance benefits and yield improvements, and help prevent or mitigate pollution in the applications they serve. Sales, Rental and Customers Sales of our cesium formate products are made to oil and gas operating companies directly by Cabot employees and sales representatives and indirectly through oil field service companies. We generally rent cesium formate to our customers for use in drilling operations on a short-term basis and on occasion make direct sales of cesium formate outside of the rental process. After completion of a job under our rental process, the customer returns the remaining fluid to Cabot and it is reprocessed for use in subsequent well operations. Any fluid that is not returned to Cabot is paid for by the customer. In prior years, a large portion of our fluids has been used for drilling and completion of wells in the North Sea with a limited number of customers, where we have supplied cesium formate-based fluids for both reservoir drilling and completion activities on large gas and condensate field projects in the Norwegian Continental Shelf. In fiscal 2018 we expanded the use of our fluids to drilling operations outside of the North Sea, particularly in Asia/the Middle East. Sales of our fine cesium chemicals are made by Cabot employees and through distributors and sales representatives. Competition Formate fluids compete mainly with traditional drilling fluid technologies. Competition in the well fluids business is based on product performance, quality, reliability, service, technical innovation, price, and proximity of inventory to customers’ drilling operations. We believe our commercial strengths include our unique product offerings and their performance, and our customer service. We are one of the leading manufacturers of fine cesium chemicals in the world and compete in the manufacture of fine cesium chemicals with multiple companies. We also compete with other technical solutions, which differ by application. Raw Materials The principal raw material used in this business is pollucite (cesium ore), of which we own, at our mine in Manitoba, Canada, a substantial portion of the world’s known reserves. In November 2015 we completed a development project at the mine, and in fiscal 2018 we completed an additional infrastructure improvement and mining project. We are continuing to assess options to access additional reserves in the mine, various technologies to augment our cesium supply and alternative sources of ore as demand for our cesium products warrants. In addition, during fiscal 2018, we entered into an offtake agreement with Pioneer Resources Limited to purchase 100% of the cesium ore extracted from the Sinclair Zone Cesium Deposit in Australia. We expect to receive this cesium ore in fiscal 2019. We believe we have sufficient raw material to enable us to continue to supply cesium products for the foreseeable future, based on our anticipated consumption.
(Sound a bit short to me)
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