Sherman Oaks, CA -- December 13, 2018 -- InvestorsHub NewsWire
-- Petroteq Energy Inc. (“Petroteq” or
the “Company”)
(TSXV:PQE; OTC:PQEFF; FSE:PQCF), a fully integrated
oil and gas company with production assets in the Asphalt Ridge
region of Vernal, Utah, is pleased to provide a 2018
year-end operations and strategic update:
Dear Shareholders,
As we begin to close out 2018, and 2019 fast approaches, I’d
like to take this opportunity to reflect on Petroteq’s progress in
2018 and provide insight into our near-term strategy and goals for
the Company. Developed specifically for our patented,
environmentally friendly clean oil recovery technology and
production process, our Vernal, Utah facility was successfully
relocated, reconstructed and restarted earlier this year. The move,
executed within only 8 months, allowed us to expand the facility’s
capacity, currently designed to produce at a rate of 1,000 barrels
per day (bpd).
Commodity Volatility Mitigation
We believe that the recent volatility of global commodity prices
has been a cause for concern to conventional oil producers subject
to high production costs. However, Petroteq’s state of the art
technology and process, with production costs of only approximately
US$30/barrel, significantly mitigates those concerns and supports
healthy margins despite prevailing market conditions. Furthermore,
upon receipt of the necessary capital, the Company intends to
expand the Vernal facility beyond the current capacity of 1,000
bpd. We firmly believe that Petroteq is squarely on the right path
to accessing and producing from the majority of Asphalt
Ridge’s 87.495 million barrels of contingent resource, details
of which are available in a report titled “Evaluation of Contingent
Resources” from Chapman Petroleum Engineering, Ltd. dated May 31,
2018 (the “Chapman Report”). Such contingencies are stated
below.
Share Consolidation Vote
Petroteq’s board recently brought the matter of a 1 for 10
consolidation of the Company’s common shares to a shareholder vote,
a necessary corporate action for Petroteq in order to reach a
minimum share price requirement for listing on the NASDAQ Capital
Market. Shareholders overwhelmingly approved the measure, however,
the board has resolved that the Company will not use a
consolidation ratio beyond 1 for 5. The Company intends to engage a
transparent and cautious methodology to the proposed NASDAQ listing
with the belief that, given the recently achieved and the
anticipated milestones, it may meet the requirements for a NASDAQ
listing without corporate intervention. Acceptance for listing
Company shares is subject to approval, in part, based on the
Company's ability to meet minimum listing requirements for the
NASDAQ Capital Market. While Petroteq intends to satisfy all of the
applicable listing criteria, no assurance can be given that its
application will be approved.
Operational Growth
The Company continues to work towards a goal of running multiple
operational facilities, with larger production capacities and
expanded licensing opportunities for its technology, including the
potential deployment of this technology for soil remediation and
reclamation of environmental hydrocarbons. We will approach these
other potential value-add projects through licensing, joint
ventures and other such structures, always being focused on
minimizing capital expenditures and maximizing the creation of
shareholder value. In 2019, we will move the Vernal facility into
Phase 2 of its lifecycle, during which we plan to increase
production capacity from 1,000 bpd to 4,000 bpd by the end of the
year. Civil construction of the additional process train will
commence in the second quarter of the year, with the expansion
estimated to come online by the third quarter. We will demonstrate
an increased focus on production in the third quarter as the
process trains ramp up to 4,000 bpd through tandem operations.
Commitment to Shareholder Value
As we execute on our strategy and share our vision for the
future, we remain committed to achieving each of the Company’s
deliverables and will keep our shareholders informed
throughout. Our plan is designed to ensure we constantly
strive to become a more focused and efficient company. As the
Company grows, we will focus our asset base to achieve consistent,
incremental production and will follow a disciplined capital
allocation process with the intention of reducing our costs. We
believe this approach will enhance our Company’s sustainability and
returns for its shareholders.
At this critical juncture in Petroteq’s corporate development, I
look forward to working alongside our board of directors,
management and on-site operational teams as we execute our plan and
strategy.
For a comprehensive view of our goals and direction, please
visit our website: www.petroteq.energy
We will continue to communicate with our shareholders regularly
and look forward to sharing new developments soon.
On behalf of everyone at Petroteq Energy, I would like to wish
you all a safe and happy holiday and a prosperous and safe
2019.
Best regards,
David Sealock, CEO
About Petroteq Energy Inc.
Petroteq is a fully integrated oil and gas company focused on
the development and implementation of a new proprietary technology
for oil extraction. The Company has an environmentally safe and
sustainable technology for the extraction of heavy oils from oil
sands, oil shale deposits and shallow oil deposits. Petroteq is
engaged in the development and implementation of its patented
environmentally friendly heavy oil processing and extraction
technologies. Our proprietary process produces zero greenhouse gas,
zero waste and requires no high temperatures. Petroteq is currently
focused on developing its oil sands resources and expanding
production capacity at its Asphalt Ridge heavy oil extraction
facility located near Vernal, Utah. In addition, the Company,
through its wholly owned subsidiary, PetroBLOQ, LLC, is seeking to
develop the first blockchain based platform created exclusively for
the supply chain needs of the oil & gas sector. For more
information,
visit www.Petroteq.energy and PetroBLOQ.com.
Forward-Looking Statements
Certain statements contained in this press release contain
forward-looking statements within the meaning of the U.S. and
Canadian securities laws. Words such as “may,” “would,” “could,”
“should,” “potential,” “will,” “seek,” “intend,” “plan,”
“anticipate,” “believe,” “estimate,” “expect” and similar
expressions as they relate to the Company, including: including the
production capacity of the plant and when it may be achieved;
completion of the consolidation; listing on Nasdaq; the
Company having multiple facilities, larger production capacities,
and licensing opportunities for its technology, including
potentially using its technology for soil remediation and
reclamation of environmental hydrocarbons; the structures used in
any successful licensing opportunities; licensing opportunities
creating shareholder value; the Company becoming a more
efficient company with a stronger balance sheet; the Company
achieving consistent production; the Company reducing costs; and
the Company successfully developing blockchain technology for the
oil and gas industry and the anticipated benefits of such
technology, are intended to identify forward-looking information.
Readers are cautioned that there is no certainty that it will be
commercially viable to produce any portion of the resources. All
statements other than statements of historical fact may be
forward-looking information. Such statements reflect the Company’s
current views and intentions with respect to future events, based
on information available to the Company, and are subject to certain
risks, uncertainties and assumptions. Material factors or
assumptions were applied in providing forward-looking information,
including: the contingencies in the Chapman Report being
overcome; regulatory/stock exchange approval of the consolidation;
the Company meeting all of the listing requirements of Nasdaq;
Nasdaq approving the listing of the common
shares, and PetroBLOQ successfully developing and
implementing a blockchain-based supply chain management system.
While forward-looking statements are based on data, assumptions and
analyses that the Company believes are reasonable under the
circumstances, whether actual results, performance or developments
will meet the Company’s expectations and predictions depends on a
number of risks and uncertainties that could cause the actual
results, performance and financial condition of the Company to
differ materially from its expectations. Petroteq’s proprietary
solvent based extraction technology is unproven to produce on a
commercial basis at 1,000/bpd. Commercial production of 1,000/bpd
at its existing plant is unproven and expansion at the existing
plant or a new larger plant is subject to financing, development
and testing to prove it is achievable and commercial. Certain of
the “risk factors” that could cause actual results to differ
materially from the Company’s forward-looking statements in this
press release include, without limitation: uncertainties inherent
in the estimation of resources including whether any reserves will
ever be attributed to the Company’s properties; since the Company’s
extraction technology is proprietary, not widely used in the
industry, and has not been used in consistent commercial
production, the Company’s bitumen resources are classified as a
contingent resource, because they are not currently considered to
be commercially recoverable; full scale commercial production may
engender public opposition; the Company cannot be certain that the
bitumen resources will be economically producible and thus cannot
be classified as proved or probable reserves in accordance with
applicable securities laws; PetroBLOQ not having the expertise
and/or funds necessary to develop and implement a blockchain-based
supply chain management system; PetroBLOQ not being able to develop
the blockchain technology to completion; blockchain technology not
being adopted by the oil and gas industry; changes in laws or
regulations; the ability to implement business strategies or to
pursue business opportunities, whether for economic or other
reasons; status of the world oil markets, oil prices and price
volatility; oil pricing; state of capital markets and ability by
the Company to raise capital; litigation; the commercial and
economic viability of the Company’s oil sands hydrocarbon
extraction technology, and other proprietary technologies developed
or licensed by the Company or its subsidiaries, which are of
experimental nature and have not been used at full capacity for an
extended period of time; reliance on suppliers, contractors,
consultants and key personnel; the ability of the Company to
maintain its mineral lease holdings; potential failure of the
Company’s business plans or model; the nature of oil and gas
production and oil sands mining, extraction and production;
uncertainties in exploration and drilling for oil, gas and other
hydrocarbon-bearing substances; unanticipated costs and expenses,
availability of financing and other capital; potential damage to or
destruction of property, loss of life and environmental damage;
risks associated with compliance with environmental protection laws
and regulations; uninsurable or uninsured risks; potential
conflicts of interest of officers and directors; and other general
economic, market and business conditions and factors, including the
risk factors discussed or referred to in the Company’s disclosure
documents, filed with the securities regulatory authorities in
certain provinces of Canada and available
at www.sedar.com.
Should any factor affect the Company in an unexpected
manner, or should assumptions underlying the forward-looking
information prove incorrect, the actual results or events may
differ materially from the results or events predicted. Any such
forward-looking information is expressly qualified in its entirety
by this cautionary statement. Moreover, the Company does not assume
responsibility for the accuracy or completeness of such
forward-looking information. The forward-looking information
included in this press release is made as of the date of this press
release, and the Company undertakes no obligation to publicly
update or revise any forward-looking information, other than as
required by applicable law.
Pursuant to the Chapman Report, the following is a summary
of contingencies and project risk related to the Company’s 93.4
million barrels of contingent resource, listed in order of
importance: (i) Verification of actual full scale processing and
operating costs. Although the Company has developed detailed
estimates of these costs by operating the pilot plant, they will
need to implement the full scale project in order to know these
costs with certainty. Chapman has estimated a 90% probability that
operating costs will be in the ranges estimated in the monte carlo
simulation, as documented in our September 1, 2016 report. The
simulation indicates that there is a 97.5% likelihood of having an
economic project if costs are in those ranges. Therefore, the
probability of this contingency being overcome (i.e. operating
costs are in the range estimated by Chapman) is estimated at 88%;
(ii) Mining costs will be similar on all Company lands. Detailed
mining cost estimates have only been prepared for the first 12.8
MMSTB of bitumen to be mined, but it is anticipated that the
bitumen volumes could be scaled up at a similar cost. The
probability of this contingency being overcome (i.e. all actual
mining costs being in line with initial estimates) is estimated at
95%; and (iii) Regulatory permission will be granted for all future
stages. This is seen as very likely, and there are no major
regulatory hurdles remaining to overcome. However, there is
potential for public opposition to a project of this nature. The
probability of this contingency being overcome (i.e. all future
regulatory approvals being granted) is estimated at 98%. Chapman
has estimated that it is 81.9% likely that all of the above
contingencies will be overcome.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Attachment
- Petroteq's Asphalt Ridge Facility
CONTACT INFORMATION: Petroteq Energy Inc. Alex Blyumkin Executive Chairman & Founder(800) 979-1897
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