John: This is the BusinessMakers Show heard here and seen online at theBusinessMakers.com. I'm John Pacini and it's featured guest time on the show and I'm pleased to be here with Stuart Page, the CEO of Glori Oil. Stuart, welcome to The BusinessMakers program.

Stuart: Thanks, John. Great to be here.

John: Great. Well let's start here. For those that don't know about Glori Oil if you could take a moment and introduce us to the company and tell us a little bit about it.

Stuart: We do enhanced oil recovery. That's really the primary goal of the company but when you think about the amount of energy that the U.S. uses, we import a lot of oil, 20 million barrels a day of oil used by U.S. citizens yet we only produce 5 million barrels a day. Forty years ago, we were producing 7 million barrels so we're getting less and less oil out of the ground and this becomes more and more of a problem. So back 50 years ago we passed what's called peak of production of oil in the U.S. and as we go forward, we'll produce less and less on a month-by-month or year-by-year basis. However, most of the oil that we've ever discovered is still in the ground. In fact, worldwide, probably two-thirds of the oil stays unrecovered in the ground.

John: Wow.

Stuart: It's a resource that's there. We know it's there. The risk of exploration has gone away so this is all about, "Can we get the oil out of the ground?" Glori Oil is all about looking at technology to improve the recovery of oil and we do it through biotechnology. Another interesting fact is that reservoirs are full of bacteria. The bacteria that moves around, that clings to the walls, that survives and has survived in reservoirs for years and years and years, millions of years through evolution and that bacteria's there for us to manipulate and the goal of Glori Oil is to manipulate that bacteria to change the recovery factor of oil.

John: So the two-thirds of oil that remains in the ground - getting that is a biological barrier is what you're saying - is that mostly or that is just part of it and that's the niche that you guys are targeting?

Stuart: Interestingly, it's an economic barrier. So it's a technical and economic barrier. So you find a reservoir full of oil and you produce and first of all you drill a hole in the ground and the oil comes out and after 10 to 15 percent of that oil is recovered, you start to look for different technologies, different ways to sweep the oil out of the ground. The most common used version is to pump water into an injection well to push it through the reservoir and get more oil out that way.

John: Right.

Stuart: Even with that, you're still down to one-third of the oil once that's completely finished. You run out of economics. It costs too much to continue to work this so looking at different strategies to try and get any amount of that additional oil out of the ground is called enhanced oil recovery. It's a lot of different sciences, lot of different technologies to do that. Microbiology is particularly unique because in all of these situations, you're using energy; you're expending energy to change what's happening in the reservoir. So there's a net energy equation. The more energy you use to get more oil out, the more it costs you and the less the equation works.

John: Exactly.

Stuart: With microbiology, we utilize a resource that's in the ground already. So you have no use for that bacteria and you have no use for a lot of the oil that's left behind. So we seek to stimulate the bacteria. We manipulate it by feeding nutrients into the ground. We feed nutrients to the bacteria to create certain behaviors. We're looking for it to do certain things and by doing that, we can change 10 to 15 percent of the recovery factor. This is an enormous number.

John: So your business model is a cost efficient way to manipulate the bacteria in such a way as to get more of the oil out of ground.

Stuart: That's a good way to summarize it, yeah.

John: That's fantastic. So the company has some interesting roots. It goes all the way back to the National Oil Company of India. I know there's some history there. Very different from the company, the U.S.-based company it is today. Tell me how the company transitioned over time and became Glori Oil that it is today.

Stuart: Yes. That's right. The initial intellectual property - the roots of the company - the research and development was done in India over a 15-year period, really, for ONGC which is the National Oil Company of India and out of that research and development they created some really interesting techniques and technology but they really started the problem. They started the puzzle. They found some great solutions to interact with the bacteria, interact with the subsurface and through stimulating producing wells; they achieved a way to recover significantly better or rather accelerated oil from a well borer. That's the technology that Glori Oil was started with and back in 2006 it was really, that was the primary goal, to stimulate production from producing wells. However over a period of time, we got better at the science. We understood it much better. Our scientists in Houston and in Argentina in fact started to understand different subsurface microbiology opportunities and that's where we push to really recover a bigger amount of oil and a better recovery from the subsurface. So we've moved a lot. We've transitioned a lot. We've created tremendous new technology, new intellectual property.

John: Right and I imagine the trend of oil prices in 2006 and at the early stages of getting the company off the ground helped make that a -

Stuart: Well, this is one of those issues throughout the last 40 years, people have understood that microbiology exists subsurface and that you can manipulate bacteria but it's really been the discontinuity of pricing of the oil commodity price. It's up and down, it's up and down and when it's moving between $10.00 and $20.00 a barrel, for a while, enhanced recovery is important then it's not again and the first person you fire is your scientist in microbiology.

John: Right. [Laughter]

Stuart: We've been lucky, unlucky as a world, as an economy - you know the oil price has gone up. It's a diminishing resource. We are running out of oil in the long term then less and less to be discovered.

John: And at $40.00, $50.00, $60.00 a barrel, obviously, that is a pretty easy financial decision to make to pursue those new technologies.

Stuart: The finance imperative becomes much easier. The equation, MPV equation becomes much more straightforward.

John: Yeah, I bet it was very exciting to investors and there was a lot of people, particularly in that economy that were interested in that and I'd love to hear more about your fundraising when we return. We're talking with Stuart Page, CEO of Glori Oil and we'll be back for more with him after this. You're listening to The BusinessMakers Show, heard here and seen online at theBusinessMakers.com.

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John: This is the BusinessMakers Show heard here and seen online at theBusinessMakers.com. I'm John Pacini and we're continuing on with Stuart Page, the CEO of Glori Oil. So before the break, we were talking about the technology that the company uses to extract more oil from the wells and I think one of the things that would probably be good is if you can give us a quick overview of sort of a Cliff Notes version of how the technology works and a non-biochemist's understanding of it.

Stuart: I'll do my best. Actually, it's a very complex set of interreactions that happen but I'll give you the very simplified version. This is the version that I find resonates very well with me and easier to understand. Think about fluid traveling through a reservoir and coming to a producing oil well so a lot of water is moving through this reservoir and it's pulling oil as it goes and gradually, it's establishing a path of least resistance and the more water that moves through, the more it pulls oil out. But now the channels that it's sweeping have got very little oil left in them but still the water flows and flows and flows and you've got more coming through. What we do is, by manipulating the bacteria, we can change those pathways. So we can change the way the water is flowing through the reservoir and as it encounters new pathways, it will pull more oil that stuck there in those paths.

John: Grab more oil along the way.

Stuart: So that's a simplified version. It's a very - it's a small part of the equation but it's the most easy part to understand.

John: No, that makes perfect sense. That's great. Thank you. So who are you guys doing business with, now? You don't own your own wells. You're applying this technology in the oil field with partners, clients - what does it look like today?

Stuart: No, that's correct. We don't do in our own fields. We are an oil field service technology company and we're working with a number of U.S. independent companies. There are thousands, literally, of small producers around the U.S. In fact there's 750,000 producing wells, so lots of owners out there but we're partnered with a few of the reasonably-sized ones. We're also partnered with a super major that is working quite strongly with us and we're doing, essentially, research and development of production work for these companies, moving from the lab through to the core, through to the field where we're actually operative in the field with them producing more oil right now.

John: So these are clients - you're working with them, you're out there, you're delivering the technology?

Stuart: That's right. These are clients that are paying a fee for the service, a fee for the technology and really a fee for the incremental oil. That's what it comes down to at the end of the day.

John: That's great. So we talked a little bit before the break about the concept of funding and growing the company and the money that it takes to get to the point where you can start bringing on clients. Tell me a little bit about that. How is the - obviously the economy's been a bit of a challenge. How is it growing a company and raising funds during a recession.

Stuart: So John, you asked the worst questions. This is - our timing was awful. I was actually asked to write a chapter for a book on biotechnology - raising capital for biotechnology companies and I wrote this in 2008 in the summertime thinking, "Boy what a great subject to write about." And words of advice that I gave the audience were things like, you know, raise when you don't need it and money is good, cash is king.

John: Right. Raise as much as possible.

Stuart: You know, take the all you can have. Well we went out at that time to raise a chunk of money, really, to accelerate our growth and two term sheets later and some really good offers, good indicated offers, the economy just suddenly crashed on us. You know, we were looking good -

John: Yep.

Stuart: - we rejected a couple of offers and now suddenly, the world changed overnight and you think about the public equity markets, well the private, the venture capital world, was devastated -

John: Right. I dried up.

Stuart: - to put it mildly. Absolutely dried up and they're already overweight as an asset class and some of the portfolio managers' field. So there was just no more money flowing into venture capital companies and they were consequently being very, very cautious about placing money and there was a paranoia. We're not gonna put new money to work right now. We're gonna, you know, consolidate our companies and look to see what's happening. So in November of 2008 we actually - we stopped our fund-raising. We stopped - we were very lucky. We've got some very solid, very good investors behind us. GTI Group out of New York and Kleiner, Perkins, Caufield, Byers out of San Francisco and they supported us with a bridge note, essentially. And we had a very strong relationship with Silicon Valley Bank, who were really great and established a line of credit for us. We worked through the next six, eight months really with this money behind us and then in the summertime 2009 we started raising again and as we went out at that time, there was a sort of sigh of relief in the VC community. It was starting to think about funding ____.

John: A little bit. A little bit.

Stuart: Not too much. Not too much. But you know we were lucky. Raising money is good under any circumstances but raising with the right partners is critical.

John: Absolutely.

Stuart: And we were very, very lucky we had some really strong backers. So Oxi Bioscience Partners came in then Malaysian Life Science Capital Fund came in and Omzest came in. Let me explain those to you. The Oxi Bioscience Partners - very strong bioscience technology investors and they brought with them some really, really strong science, really great for our scientists group. Malaysian Life Science Capital Fund, the CEO of that group is Ganesh Kishore who's a really, he's a world-class microbiologist in his own right so having him come in as a vested partner and as investor was really important and then Omzest is a Omani group and this gave us a window into the Middle East which, as you know, the oil field is a great opportunity -

John: It's a critical inroad, yeah.

Stuart: So these three new investors alongside our current investors were just a tremendous group and we closed over a year ago, nearly a year ago, rather. It was a good round and we've had very solid progress since and great support from them.

John: Well that's one of the things that you see with entrepreneurs so often is lacking the distinction between raising funds or brining on somebody with just a checkbook versus a checkbook and brains and connections and the other things and those are the things that can be as valuable to you - sometimes even more valuable - than the checkbook. Obviously the checkbook's key but it's great when you're able to put a team together like it seems you guys have done over the last several years. Is that something, as the CEO of the company, is that something that came naturally to you? Did you - I mean, it seems that you were brought on, you were recruited to come on as an executive CEO and then the tide changed a little bit with the economy and seems like you sort of moved into a startup CEO sort of mentality and growing the company. How's that transition been?

Stuart: Certainly at the beginning, I was brought in as a growth CEO in the true, sort of executive sense versus a startup CEO. I wouldn't describe us as a startup. We were an early-stage company at the time and certainly my responsibilities and roles and expectations changed significantly in the early days as we recognized the opportunity to really develop the science in a different way which meant we needed to bring in new scientists and resource ourselves somewhat differently. It's been fun. It's been a really different challenge but, you know, I wasn't new, it wasn't my first rodeo, so to speak. I'd been involved in startup companies before and had had the entrepreneurial opportunity before so this was - it was not - I wouldn't say a homecoming but it was a lot of fun. We have a tremendous team at Glori Oil and one of the key things about any entrepreneurial experience you get the right team together and you get everybody gets motivated together and you're chasing an objective and it really changes the dynamics and great things get achieved. And we think that's where we're going.

John: Well obviously you have a great background, Harvard, Oxford, great executive background. How do you put your team - what does it take to work on the Glori Oil team? What are your criteria for being a part of the team and helping grow the company?

Stuart: Well certainly commitment and intelligence. You know, 30 percent of our staff are PhDs. Sixty percent have further degrees, have higher degrees. Really motivated group and really committed. I tell you just for instance whilst we were raising money, we were going through that dark period where we didn't know what was happening with the world, we didn't lose anybody from the team in that period of time.

John: That says a lot.

Stuart: Anybody, except for part-time and yeah, I mean everybody is really focused on the goal. Everyone's committed to success and we're working hard to get there. You know we've established some master goals that we're fervently chasing right now and so really that's what it is. What it takes to get on the team? You know, it takes passion. It takes these things.

John: Right. That's fantastic. Well, I'd love to hear a little bit more after the break about the lessons you've learned in the last few years and talk a little bit more about the future of Glori Oil when we return. We're talking with Stuart Page, CEO of Glori Oil and we'll be back with him for a little bit more after the break. You're listening to The BusinessMakers Show, heard here and seen online at theBusinessMakers.com.

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John: This is the BusinessMakers Show heard here and seen online at theBusinessMakers.com. I'm John Pacini and we're continuing on with Stuart Page, the CEO of Glori Oil. Stuart, we were talking before the break a little bit about your background. Tell me a little bit more about your executive background prior to Glori Oil.

Stuart: Sure. Actually, when I came out of university as an undergraduate I went out and started working the oil field of the Southern North Sea in the U.K. so my first work experience was to get in a helicopter and fly out to a rig and this is really when I fell in love with the industry. So I've been in the oil industry throughout my career. I did a decade operationally around the world. I worked in seven different countries, averaging a year and a half in each one. I spent a time starting up a group in Nigeria which was a very interesting and perhaps my first entrepreneurial experience. I had some really great experiences but since then I've had very many varied and fortunate positions. I've been in mergers and acquisitions. I've been in private equity. I've been in startup entrepreneurial situations and I've been in large companies. So I've really had the opportunity to see all aspects of managing and growing a business from various different views, including, you know, the financial side, the capital raise and so on. So all my experience is oil field services but I think I've had a very broad opportunity there.

John: Right and they've brought you to where you are today. It culminated in the ability to helm this company.

Stuart: Yeah - well really they've - yeah, they've given me the opportunity to see a lot of this stuff before and -

John: Right.

Stuart: - do it better the second time. I think that's the goal, right?

John: Well, exactly. Well based on what you've seen in your prior career and what you're doing now with Glori Oil, imagine there's an entrepreneur out there that's listening to the show that's with a company, that's growing it, what's a piece of advice that you would give them? If there's one piece of advice as a mentor that you would give to a startup entrepreneur, what would that be?

Stuart: Gosh, the piece of advice I'd give, I think, would be never compromise on people. The team is the most important thing and you know, we're fortunate as I mentioned to have a tremendous team at Glori Oil. You've got to bring the best people in and they've got to be passionate about what they're doing and if they're not, then you've got to think about how you rectify that situation. Really, the team is what defines the opportunity. You can have the best idea with a team that's non-functional and you'll never get there.

John: That's great. Well thank you so much for being on the show.

Stuart: Thank you, John.

John: Okay, we've been talking with Stuart Page, CEO of Glori Oil. And you're listening to The BusinessMakers Show, heard here and seen online at theBusinessMakers.com.