Petroteq Energy Inc. (the “Company”) (TSX VENTURE:PQE)(OTCQX:PQEFF), a company focused on the development and implementation of proprietary technologies for the environmentally safe extraction of heavy oils from oil sands, oil shale deposits and shallow oil deposits.
As the Chairman and a founder of the Company, I want to take this opportunity to explain our current business and to provide you with a glimpse of where I believe we can go as a company and what we can potentially achieve.
As previously announced, we recently restructured our operations and Balance Sheet in an effort to improve the ability of the Company to attract future investment facilitate or enhance the growth of our business.
We completed a reverse stock split/consolidation that resulted in an increase in the price per share of our common stock.
We decided to change our name to better reflect the future direction of the Company, using a combination of “petro” and “technology” in our name since we are in both the energy and energy- technology space.
We also completed a significant number of shares-for-debt transactions to reduce the Company’s debt structure and position at the corporate level. This indebtedness was incurred in the process of developing our technologies, building our production facilities, and permitting for our oil sands resources.
Upon completion of the shares-for-debt transactions, the Company will have just under 40 million shares outstanding, with almost US$22 million in shareholder equity. We will continue to develop our overall brand and corporate activities under the name “Petroteq Energy”, now trading as PQE in Canada and PQEFF in the U.S., and will conduct our businesses and operations through our subsidiaries and affiliates.
The Company currently has two primary businesses:
Heavy Oil Production in Utah
We have a unique hydrocarbon extraction technology used in the development of our oil sands resources near Asphalt Ridge, Utah. This technology – first deployed in our pilot plant in Maeser, Utah – utilizes a proprietary, closed-loop system, which extracts over 99% of all hydrocarbons while using no water, generates no greenhouse gases and requires no high temperatures or pressures. The only two elements leaving the system are the cleaned sands and the oil itself, with over 99% of the benign solvents being recovered and recycled back into the system.
We are in the process of relocating our extraction plant from the Maeser area to a location within our Asphalt Ridge mineral lease and are planning to expand and restart the plant during the early part of calendar 2018.
We have a large contingent oil sands resource base of approximately 87 million barrels of oil equivalent within our Asphalt Ridge mineral lease.
We produced 10,000 barrels of oil last year from our oil sands resources located near Asphalt Ridge and plan to increase production in the near future.
Oil Production in Texas
We currently have 7,000 acres under mineral leases in southwest Texas through our ownership interest in Accord GR Energy, Inc. (“Accord”).
To facilitate our development of the Texas properties, Galex Energy Corporation has licensed limited rights to Accord for two enhanced oil recovery (EOR) technologies. The first technology – called SWEPT – is designed to recover hydrocarbons from wells and structures with low pressure or no energy drive mechanism, from residual or partially depleted properties in mature fields, and from structures having complex geophysical matrices or that contain tight oil, in each case by improving rock and fluid properties through the introduction of directed energy waves. The second technology – referred to as S-BRPT – is designed to recover solid and liquid hydrocarbons through conversion to gaseous forms followed by well- based recovery at greater depths, combining both specially designed insitu and well production and recovery methodologies.
Accord’s acquisition of the Texas leases in 2016 included 81 shallow oil wells having limited historical production, due primarily to low pressure and the absence of an energy drive mechanism in wells completed in shallow zones in this area. Recently, however, Accord drilled three new wells on the Texas properties and is now gearing up for production utilizing and testing the SWEPT and S-BRPT technologies. The oil produced from these wells is a heavy crude oil having an API gravity in the upper range of heavy oil at 18-22 degrees.
Early indications suggest that the use of SWEPT and S-BRPT in low-cost shallow wells will substantially enhance the recovery of heavy oil deposits in this area. Accord is currently developing strategic and capital plans with a view toward additional leasing and drilling in this area.
Technology Reliance; Advancement
In both the Utah and Texas projects, the Company and its subsidiaries and Accord, employ proprietary energy- related technologies, processes and methodologies to recover heavy oil that, once full production is established, are anticipated to be profitable in the current oil pricing environment. Moreover, based on the pilot plant operations conducted in Utah and the initial results demonstrated by the SWEPT and S-BPRT technologies in Texas, the Company believes that its deployment of proprietary energy-related technologies will provide it with distinct economic advantages in the production of heavy oil, both in the oil sands area of Utah and in the traditional oilpatch areas of Texas, and may lead to greater development opportunities in the future.
We believe that the corporate, strategic and operational actions that have been and are being taken by the Company will provide greater clarity to the markets and to you, our shareholders, as to the direction of the Company and will contribute to greater shareholder value as our plans are implemented.
Alex Blyumkin, Chairman
About Petroteq Energy Inc.
The Company’s primary focus is on business growth and the creation of shareholder value through the development and implementation of (1) proprietary, environmentally friendly heavy oil processing and extraction technologies in developing its oil sands resources and in expanding production capacity in its heavy oil project in the Asphalt Ridge Area of Utah, (2) oil and gas exploration and production through the development and recovery of heavy oil through the use and application of proprietary EOR technologies, currently being deployed by Accord (46% of which is owned by the Company), on mineral leases located in southwest Texas, (3) evaluation and development of other medium to heavy oil exploration, production and recovery projects on a global basis – whether through acquisitions, leasing or production sharing agreements, joint ventures or joint interest opportunities, or other arrangements with private and governmental entities – utilizing proprietary licensed technologies under scenarios that generate a substantial return on investment.