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China's National Mandate Creates Opportunity for STWA's Oil Pipeline Efficiency Technology


December 27, 2011 - Santa Barbara, CA

On the heels of announcing a Letter of Intent to commercialize its oil pipeline efficiency technology in China, STWA, Inc. (OTCBB: ZERO) ("STWA" or the "Company"), a developer of energy efficiency technologies in the multi-billion dollar oil pipeline and diesel engine markets, issued today an assessment of the China oil pipeline market and China's influence on the global energy market.

STWA announced on December 21, 2011 that it has signed a Letter of Intent with Beijing Heng He Xing Ye Technology Development Co., Ltd ("TDC") for licensing, sales and distribution of STWA's Applied Oil Technology™ (AOT™) into the Chinese market.

Recently, the State Council of China issued an environmental mandate to the country's energy industry to reduce energy consumption 16% by 2015. According to recent U.S. Department of Energy testing conducted in the fall of 2011, STWA's AOT™ can reduce the amount of energy used in transporting oil per mile by over 13%. This energy-efficiency improvement would translate into numerous, direct financial and environmental benefits for Chinese state-owned oil firms. TDC and STWA are at this time working to make STWA's AOT™ a key strategic resource in China's national 16% energy reduction plan.

"We have a solid relationship building with TDC as guardian of our intellectual property in China. They have deep relationships with major oil concerns in China and Chinese government officials. We were introduced to TDC through their technical lead, who, when a graduate student at Temple University, studied under Dr. Tao, our chief physicist and inventor of AOT™. Following our recent productive meetings with senior TDC management at our Santa Barbara headquarters and in New York, we are scheduled for January meetings in China to advance our commercialization plans," stated STWA Chairman and CEO, Mr. Cecil Bond Kyte.

In a recently published report, the U.S. Energy Information Agency (EIA) stated, "Rapidly increasing energy demand has made China very influential in world energy markets." The EIA report showed that China is the world's second largest oil consumer behind the United States, and is the overall largest global energy consumer. The report further stated that China consumed an estimated 9.2 million barrels per day of oil in 2010, up over 10% from previous-year levels. The combination of market size and pace of market growth make China a key global influencer in the energy and oil markets.

According to the China National Petroleum Corporation, China has about 13,932 miles of total crude oil pipelines and nearly 8,265 miles of oil products pipelines in its domestic network. China's spending on pipelines is estimated to increase 40% by 2015, driven by the construction of new pipelines to deliver oil supplies from newer oil-producing regions and from downstream centers to more remote markets. AOT™ can make a significant contribution by maximizing economic benefits and reducing environmental impacts of transporting these new reserves.

China's oil industry is dominated by two vertically integrated national firms, China Petroleum and Chemical Corporation (Sinopec), and China National Petroleum Corporation (CNPC) and its publicly-listed arm PetroChina. These two entities account for 60-80% of China's total oil and gas output. Other state-owned firms are quickly growing market share. These include CNOOC Limited, China's largest producer of offshore oil and gas and Sinochem International, listed on the Shanghai exchange, the largest domestic third-party petrochemical storage and logistics provider in China. These four main stakeholders in the market are closely tied with government and are aligned with government's objectives to improve energy efficiency.

"We believe that AOT™ has the potential to assist China in reaching its aggressive energy conservation and environmental goals," stated Bjørn Simundson, STWA Executive Director, Program Management/Operations. "Since China is the largest energy consumer in the world, and is recognized as a global influencer in energy markets, we feel it is a natural fit to be the first international market for us to advance commercial interest in our AOT™ oil pipeline efficiency technology. I believe that working with TDC to protect our mutual interests, and to provide introductions to national oil companies in China bodes well for AOT™ as we advance our commercialization program not only in China, but also in North America and other international markets."

About AOT™
STWA's Applied Oil Technology™ (AOT™) allows pipeline operators to temporarily reduce the viscosity of the crude oil within their pipeline(s) to reduce the fluid-drag (also known as friction-loss) between the fluid and the pipeline. By reducing the friction loss, pipeline operators' pump systems require less energy to maintain a constant flow rate, thereby directly reducing daily operation costs.

About STWA, Inc.

STWA, Inc. (OTCBB: ZERO) develops and commercializes energy efficiency technologies that assist in meeting increasing global energy demands, improving the economics of oil extraction and transport, and reducing greenhouse gas emissions. The Company's intellectual property portfolio includes 24 domestic and international patents and patents pending, which have been developed in conjunction with Temple University. STWA's technologies include Applied Oil Technology (AOT™) which improves oil flow through pipelines. AOT™ has been proven in U.S. Department of Energy tests to increase the energy efficiency of oil pipeline pump stations by over 13%. ELEKTRA™ improves diesel engine efficiency for industrial diesel engines, as well as diesel-powered trucks, trains, marine vessels, military fleets and jet turbines. More information including a company Fact Sheet, logos and media articles are available at: http://www.stwa.com.

Safe Harbor Statement

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from any future results described within the forward-looking statements. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the Securities and Exchange Commission. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release.

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Contact Information

Investor Relations Contacts:
Mr. Andrew Haag
Managing Partner
IRTH Communications, LLC
Tel: +1-866-976-IRTH (4784)
E-Mail: Email Contact
Website: www.irthcommunications.com
Company Website: www.stwa.com

Mr. Jeremy Roe
Managing Partner
Integra Consulting Group, LLC
Tel: +1-925-262-8305
E-Mail: Email Contact
Website: www.integraconsultinggroup.com

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