NXT Energy Signs $1.1 Million Contract with Kerogen Exploration

On November 27, 2013 NXT Energy Solutions Inc. (SFD-TSX.V; NSFDF- OTCBB) announced that it has signed a US $1.1 million contract with Kerogen Exploration LLC ("Kerogen") to conduct two pilot SFD(R) surveys in Texas and Florida, USA.

NXT Energy has developed a proprietary airborne survey technology, "Stress Field Detection "(SFD(R)") which significantly reduces the cost, time and most importantly, risks involved in hydrocarbon exploration. It is a high stakes game.

Current global geophysical exploration spending is around $12 billion per year, this technology can potentially save a company hundreds of millions of dollars and years of exploration expenses.

Kerogen is a private company financed by Riverstone Holdings LLC. It holds 100,000 acres in Texas in the Permian Basin and 125,000 acres in the South Florida basin. Riverstone is a major US player - a private investment firm that has raised $27 billion for energy focused projects and has committed $24.8 billion to 104 investments in North America, Latin America, Europe, Africa and Asia.

"The Kerogen contract is a great opportunity to build our presence in the USA," stated NXT President and CEO George Liszicasz, "We look forward to working with Kerogen to become an integral part of their future on-shore and off-shore exploration programs."

NXT’s contract with Kerogen reflects new momentum being gained by SFD(R) following a joint paper presented in July 2013 by PEMEX - the National Oil Company of Mexico, and NXT Energy at the "Next Generation Oil & Gas Latin America Summit" in Cartagena, Colombia.

The paper was later audited by Ronald E. Newman, an independent geologist engaged by Mackie Research Capital Corporation ("Mackie").

"According to the integration study, SFD(R) was able to detect 11.9 billion BOE of 3P reserves out of a total of 12.3 billion BOE in the "blind" test conducted at the request of PEMEX," states the Mackie report, "We believe it was warranted to seek the assistance of a reputed geophysicist to independently audit the study."

NXT uses a Cessna 560 Citation jet, which cruises 500 km/h at an altitude of 3,000 metres to quickly survey large tracts of land. SFD® locates trapped reservoirs at stage I of the exploration cycle. Airborne sensors detect orientation changes in the horizontal gravity field.

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Mackie concluded that "The methodology used by PEMEX to investigate the capabilities of the SFD® tool represented a true blind test, as NXT did not have any access to the PEMEX proprietary geological and geophysical (G&G) data prior to submitting its findings to PEMEX."

The 47 identified SFD(R) targets contained 98% of the estimated total oil – giving SFD(R) "elephant hunter" status. The technology may have over-looked the smaller reserves, but identified the potential company-makers.

This recent Mackie publication noted several interesting points:

· "Publications relating to and in connection with quantum gravimetry suggest that NXT is at least six to ten years ahead of its competition,"

· "The cost of a 2D seismic program can be as high as $30,000 or more per line km in frontier regions, while a SFD(R) program costs approximately $1,500 per line km ... the SFD(R) airborne system can be deployed rapidly; surveys can be conducted significantly faster as compared to seismic."

· "A very small percentage of the world’s geophysicists understand the use of standard gravity interpretation in the exploration for oil and gas," concluded Mackie, "As more technical papers like the one presented jointly by PEMEX and NXT are published, an increased acceptance of the technology will emerge within the geophysical community".

With the cost of a single exploration well averaging about $50 million, and drastically higher in remote and offshore settings, it is no surprise that oil companies are focussed on reducing drilling risk.

PEMEX is actively seeking technology partners to increase drilling efficiency and production rates. Following the initial blind test SFD(R) survey that NXT conducted for PEMEX in 2012, NXT has been working on leveraging the success of the initial results into becoming a larger, integral part of PEMEX exploration program.

Another important recent development for the technology is that Pakistan Petroleum Ltd., one of Pakistan’s large NOCs, has also just presented a joint technical paper on the highlights of the results of NXT’s SFD(R) Q1-2013 survey. The fact that large clients are publishing technical papers which highlight correlations of SFD(R) data with anomalies identified using other standard geophysical tools indicates that the SFD(R) technology is gaining momentum and industry acceptance as a value-added exploration tool.

NXT Energy (SFD-TSX.V) stock price has surged 73% since the presentation of the joint paper in Colombia this summer. NXT has only 42 million common shares outstanding (57 million fully diluted) and is currently trading at $1.72, for a market cap of $72 million.