In the epic battle between OPEC and the U.S. for global market share - low cost producers should reap a stunning energy windfall.
We’re focusing on one little company - Petroteq Energy Inc. (TSX:PQE.V; OTCQX:PQEFF) - which is unlocking trapped oil in U.S. oil sands for costs as little as $22/barrel.
Technology is their key advantage. Their patented Liquid Extraction System is the first ever to generate production from Utah’s 32-billion-barrel heavy dry oil sands resource.
It extracts over 99 percent of all hydrocarbons in the sand, generates zero greenhouse
gases and doesn’t require high temperatures or pressures.
In Asphalt Ridge—Petroteq has an estimated 87 million barrels of oil equivalent worth $5.2 billion at today’s prices. The overall cost for production is expected to come in at only $22 a barrel.
The plan is to reach 5,000 bpd by 2019 with a cost of production which could reach as low as $18 per barrel. There’s potential, says Petroteq, to achieve 30,000 bpd with proven reserves.
And that isn’t even their biggest opportunity.
Petroteq’s technology could generate billions in licensing fees around the world, and it is eyeing the opportunity to file patents in all countries with oil sands reserves.
They’re not only targeting the 1 trillion-plus barrels of oil in the sands of Utah, Colorado and Wyoming, but trillions more barrels from oil sands all around the world.
Here are 5 reasons to watch Petroteq (TSX:PQE.V; OTCQX:PQEFF) very closely:
1) “Best of Class” Patented EOR Tech
2) 87 Million Barrels of Oil Equivalent Worth $5.2 Billion trapped in oil sands on its property
3) A Blockchain Solutions For Energy Markets
4) Skin in the Game Expert Management Team
5) Prices on the Rise, Heavy Oil Demand Shifting Up
Unique Oil Sands Technology
The OPEC/U.S. energy war is heating up. Recently, American production of crude oil rose to an all-time high, surpassing 10 million bpd.
In February, the International Energy Agency predicted that U.S. shale output could meet nearly all new global demand, thanks to its “extraordinary growth.”
The key to this battle is technology. And the U.S. national interest right now is all about increasing domestic energy sources.
Most investors wouldn’t think of the oil sands as a solution. They have a bad reputation: people tend to think of oil sand extraction as dirty and expensive.
The tar sands of Canada are one of the biggest petroleum deposits on earth.
Unfortunately, they were so expensive to exploit that most majors had to divest from their holdings there after the oil price crashed below $60/barrel in 2014.
Petroteq (TSX:PQE.V; OTCQX:PQEFF) is getting ready to change that.
Technological advances such as their patented Liquid Extraction System will become a key focus for revolutionizing the economics of U.S. oil sands deposits. So far Petroteq’s technology works best on dry oil sands, and the U.S. has plenty.
Existing oil sands extraction technologies use tons of water and leave toxic trailing ponds.
Petroteq’s system produces oil and leaves behind nothing but clean, dry sand that can be resold as fracking sand or construction sand or simply returned to Mother Nature.
Better still - it expects to achieve production costs of as low as $22/barrel.
The end result? The extracted crude oil is free of sand and solvents and then pumped out of the system into a storage tank.
According to Petroteq Chairman and CEO Aleksandr Blyumkin, “no other company has what
we have in this space.”
The Technology Could Unlock 1.2 Trillion BOE In The U.S. Alone
For Utah’s locked in oil sands, this tech could be a silver bullet.
The State of Utah is home to more than half of all U.S. oil sands deposits, and the Uintah region has been producing oil since the 1950s. It’s got more than 32 billion barrels of oil equivalent in sands waiting to be extracted from 8 major deposits.
It’s also got fantastic infrastructure.
There are 5 major refiners with truck routes to Salt Lake City.
Even better, this is heavy oil-producing oil sands that can be accessed directly from the surface, so there’s no risk of running into a ‘dry well’.
Until now the problem has been economics.
At current production costs, Utah oil sands are a non-starter.
That’s where Petroteq comes in. Its patented oil extraction technology was the very first to generate production from Utah’s massive heavy oil resource.
Petroteq acquired the Asphalt Ridge for $10 million, giving it the rights to exploit a huge deposit of an estimated 87 million boe equivalent of bitumen in eastern Utah.
At current oil market prices, the field’s oil has gross value of up to $5.2 billion. That’s big news, for a company with an $85 million market cap.
Their plant is just coming online, and it’s soon ready to produce 1,000 bpd at a cost expected in the low $20s per barrel. After that, they’ll be getting ready to ramp up to 5,000 bpd.
But the real opportunity is bigger than that. The potential for mass application of Petroteq’s (TSX:PQE.V; OTCQX:PQEFF) new technology is vast.
Canada alone has 100 billion boe of oil sands worth $6 trillion, and worldwide reserves are
vast. Kazakhstan, Venezuela, Russia and China all have trillions of barrels locked up in oil sands, and are eager to start working with brand-new low cost technology.
Utah, Colorado and Wyoming together hold about 1.2 trillion boe in oil sands and shale, worth a combined $72 trillion at current market prices.
They’re ripe for safe, inexpensive exploitation through Petroteq’s new methods.
Fortunes can be built on licensing fees alone.
Blockchain Could Revolutionize Energy Supply Chains
Petroteq’s EOR technology isn’t their only licensing opportunity.
Nothing could change oil industry supply chain management more than blockchain.
Supermajors BP, Shell and Statoil are getting into blockchain because it promises to make oil and gas trading a lot easier - while eliminating middle men.
With its subsidiary PetroBLOQ, Petroteq is developing the first blockchain-based platform exclusively for the oil and gas sector’s supply chain needs—GLOBALLY.
PetroBLOQ is already attracting major attention:
It was cited by Geoffrey Cann, director at Deloitte specializing in oil and gas, as a contender for best blockchain tech in the energy sector.
In January PetroBLOQ reached an agreement with Pemex, the Mexican state-owned oil company. Through its PetroBLOQ subsidiary, Petroteq is developing a supply chain management system for Pemex that could radically improve efficiency.
Ultimately, its blockchain platform could end up involved in every single transaction in the oil and gas supply chain—upstream, midstream and downstream.
Management Has Major Skin In The Game
The management at Petroteq (TSX:PQE.V; OTCQX:PQEFF) is a cut above the rest: they know the energy sector and the world of blockchain intimately.
More importantly, they’re betting on themselves to win.
CEO and Chairman Alexsander Blyumkin has invested millions in the business, including an interest-free loan for the production facility at Temple Mountain in Utah.
Founder and CTO Dr. Vladimir Podlipskiy is a 23-year veteran in chemistry, R&D and manufacturing, and is a chemical scientist from UCLA.
He’s the oil extraction tech genius with a line-up of patents for everything from oil extraction and mold remediation to fuel reformulators.
Chief Geologist Donald Clark, PhD, a widely published geologist and consultant, is the blockchain tech mastermind in this group.
Together they bring the experience necessary to execute on Petroteq’s ambitious agenda.
CONCLUSION
Now is the time to pay attention to Petroteq (TSX:PQE.V; OTCQX:PQEFF) for a single big reason - the likely imminent spike in demand for heavy oil.
President Donald S. Trump has announced a $1.7 trillion infrastructure plan.
Billions of dollars will be deployed to rebuild U.S. infrastructure and it requires exactly the kind of heavy oil that Petroteq can produce from oil sands.
This is a story of extracting costs of $22 per barrel of oil… in a $70 per barrel world.
The U.S. is positioned to become the world’s dominant energy producer. And it’s all thanks to innovation from companies like Petroteq (TSX:PQE.V; OTCQX:PQEFF).
I’m long, and I’m excited for their plant to come online.
Other companies to watch:
Franco-Nevada Corporation (TSX:FNV) specializes in securing precious-metal streams, but the company also works in the oil and gas industry. With key assets in some of North America’s most desirable oil and gas plays, including Texas, Oklahoma and Alberta, it is clear that the company has amazing potential in the coming years.
FNV ended 2016 with a relative bang. And as oil and gas prices inch up, investors are watching this diverse company very closely.
Canadian Natural Resources Limited (TSX:CNQ): This 53 billion market cap giant is one of the biggest names in Canadian crude oil and natural gas exploration, development and production. In the second half of the year this giant has turned around its stock and has now seen consecutive months of strong gains.
There is certainly exposure to oil sands here, and production and profits are both on the rise. It is all looking positive here as oil markets turn around and oil prices appear to have found a new price range that will only see production rise again in Canada.
Enbridge, Inc (TSX:ENB), based in Canada’s oil sands capital Alberta, is an energy delivery company focusing on transportation, distribution, and generation of energy. Operating in the United States and Canada, Enbridge owns and operates the largest natural gas distribution network in Canada and the longest crude oil transportation system in the world. Founded in 1949, investors can feel confident in Enbridge’s experience and market know-how.
Though not strictly dealing in commodities, Enbridge’s diversified assets and connections to a variety of industries position the company as solidified player in many Canadian investors’ portfolio.
Husky Energy Inc (TSX:HSE): This integrated oil and gas company out of Western Canada also has stakes in the South China Sea and the Atlantic. While shares have dropped this year, they’ve started to rally since the second quarter.
The dip in stock price in the third quarter certainly looks to be bottoming out now, with the Royal Bank of Canada increasing its price target to $17 and energy markets looking to be at a turning point.
Suncor Energy (TSX:SU): Suncor's Oil Sands operations cash operating costs per barrel are maintained at $23.00 - $26.00 despite the five-year planned maintenance turnaround at Upgrader 1. Some one-quarter of the company’s 2018 capital spending program is allocated towards upstream growth projects in the Oil Sands and E&P businesses.
As one of the biggest names in energy, Suncor has adopted a number of high tech solutions for finding, pumping, storing, and delivering its resources.
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Forward-Looking Statements
This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that PETROTEQ will be able to produce oil as currently scheduled, at the rates of production announced and at the targeted low prices from its Utah property; that PETROTEQ will successfully develop a blockchain supply chain solution for the oil industry; that it will have customers and contracts for its supply chain technology; that oil will be as much in demand in future as currently expected; that PETROTEQ’s technology is protected by patents and that it doesn’t infringe on intellectual property rights of others; that PETROTEQ will find licensees for its technology and that it can patent its technology in many countries; that PETROTEQ’s technology will work as well as expected; that blockchain technology will help PETROTEQ create a supply chain management system which can handle all transactions; and that PETROTEQ will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company’s patents and other technology protection are not valid, patents may not be granted in countries where PETROTEQ wants to license its technology; production of oil may not be cost effective as expected, technology development costs may be much higher than expected, there may be construction delays and cost overruns at the production plants, PETROTEQ may not raise sufficient funds to carry out its plans, changing costs for extraction and processing; technological results based on current data that may change with more detailed information or testing; blockchain technology may not be developed to be as useful as expected and PETROTEQ may not achieve its business plans; competitors may offer better technology; and despite the current expected viability of its projects, that the oil cannot be economically produced with its technology. Currently, PETROTEQ has no revenues.
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