With Joe Biden now running significantly in front of the incumbent in the race for the White House just days ahead of what may go down as the most polarizing election in US history, the country braces for sweeping changes in administrative tone and policy direction.
One issue that has recently been cast into the spotlight with this surging blue momentum is the future of the oil industry. If Biden wins, he will be an advocate for reforming and replacing the oil industry as we now know it, likely through a series of steps that will extend far beyond his own four years. But the advent of the process will spur a reorganization of invested capital priorities in the energy space. This will implicate potential in the renewable energy space, naturally. But everyone already knows that, and related stocks have already significantly repriced to discount this dynamic.
However, there is also another direction to appreciate that lies in the intermediate horizon of this theme: less environmentally damaging fossil fuel-based energy. It’s almost certainly a piece of the puzzle. But there are few options for investors, which suggests those most aligned with this theme will have a near monopoly as capital flows pour in to fill this niche.
One stock that may be well worth your time in the research process on precisely this basis is Petroteq Energy Inc (OTCMKTS:PQEFF), an integrated oil company focused on the development and implementation of proprietary oil extraction technologies that represent a cleaner, more environmentally friendly version of fossil fuel production.
Given that the company appears to be ramping up toward much more significant commercial activities in the months ahead, now is a good time to take a closer look.
Clean Oil
Aiding this process, Petroteq Energy Inc (OTCMKTS:PQEFF) just released its management’s vision of what it believes to be the company’s edge – what gives the company a unique advantage in the market as it positions itself as a provider of a clean technology for the recovery of oil from oil sands.
According to the release, the company’s Clean Oil Recovery Technology (or its “CORT”, as it terms the proprietary tech) integrates clean technology with oil sands production. Some CORT attributes of note were listed in the release, and are reproduced here:
- Proprietary extraction technology
- Pre-FEED (Front End Engineering and Design) work for 5-10k bpd facility completed recently by Crosstrails Engineering LLC, a subsidiary of Valkor LLC (as reported in the Company’s press release dated September 15, 2020)
- 10,000 bbl of oil produced to date from pilot plant and Asphalt Ridge facility
- Extraction technology that greatly reduces greenhouse gases when compared to other extraction methods
- Leaves no waste water or tailings pond
- Up to 99% of hydrocarbons are extracted
- 95% of solvents used are recovered and recycled within the closed-loop system
- Produces bitumen and a clean, dry sand (meeting EPA Tier 1 standards) as the only by-product
- Relatively small modular footprint; designed to be scalable through the addition of parallel production trains
- Design is based upon standard oil processing equipment, short lead times
- Low capex estimated at US$15-$20k per daily bbl per recent pre-FEED study
- Low production costs, estimated to average $25-$30/bbl dependent upon production volume
- Flexibility in terms of being capable of producing various different end products
The release also notes that a niftier presentation of this information is available on its website (https://petroteq.energy/technology/oil-sands-extraction).
George Stapleton, Petroteq’s COO, commented on the distinct features of CORT that set it apart, saying: “CORT is an environmentally benign process for producing oil from oil sands having low initial capital requirements and low operating expenses while allowing for end products to be varied to best suit market conditions.”
The Future Appears Bright for Petroteq
According to its release, Petroteq Energy Inc (OTCMKTS:PQEFF) is evaluating the various plant outputs that can be produced using its CORT technology to optimize end product pricing. As it notes, besides the base bitumen that can be extracted from the mined oil sands, the Company will evaluate the use of MSAR® technology from Quadrise Fuels International plc for post processing of the produced bitumen.
We found this passage particularly interesting:
“Regulations adopted by the International Maritime Organization (IMO) require that sulphur content in marine fuels be reduced from 3.5% to 0.5% with effect from January 2020. The Company believes that the MSAR® process will add value to the oil produced from Asphalt Ridge by producing a low sulphur fuel oil suitable for use as a marine bunker fuel, or as a fuel oil for industrial power generation. A benefit of the MSAR® process is that because hydrocarbon droplets are pre-atomised within the emulsion and are significantly smaller than the droplets formed from atomising HFO, MSAR® burns almost completely, leaving virtually no particulate carbon in the exhaust and making it more environmentally friendly. Low sulphur fuel oil currently trades at a premium to WTI crude.”
PQEFF is also apparently evaluating the possibility of adjusting its extraction plant to produce a dual output of diesel and asphalt, both of which trade at a premium to WTI. There’s also good news for shareholders: Petroteq also intends to complete two shares for debt transactions, pursuant to which it will issue an aggregate of 2,041,095 common shares in satisfaction of US$149,000 of indebtedness to shore up the structure. In addition, the company also announced that it has closed the US$300,000 principal amount (including an original issue discount of 20%) unsecured convertible debenture financing previously announced on September 22, 2020, further reducing dilution risk.
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