Canada is one of the world’s largest oil sands producers. Behind Venezuela and Saudi Arabia, Alberta has the third largest oil sand reserves in the world. As of 2014, the Alberta oil sands had proven reserves of around 166 billion barrels of oil and produced 2.3 million barrels of oil per day that year. However, since the decline in oil prices, oil sand production growth has seen very limited gains in Canada.
According to Statista, this will change in 2017. For 2016, the research agency has suggested total oil sands production in Canada will amount to around 2.39 million barrels per day while 2017 is expected to increase to around 2.66 million barrels. Statista is forecasting consistent growth in oil sand production over the long-term, with Canada expected to see total oil sand production of around 3.67 million barrels per day in 2030.
While the long-term appears strong for Canadian oil sand producers, others are very concerned about the potential impact that oil sand production can have on the environment. According the Environment Canada, the Alberta oil sands are expected to see a greenhouse gas pollution increase 124% between 2010 and 2030. The environmental agency says that, if unchecked, oil sand pollution could make up 14% of Canada’s overall carbon footprint by 2030. In addition, Canadian Prime Minister Justin Trudeau has been extremely vocal on ramping up efforts to limit environmental impacts by some industries. The prime minister must now walk a tight line between keeping economic growth stable and making good on his promises to the environment.
One company that is effectively using technology to produce oil, while limiting its environmental impact is Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE).
Overview: Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE)
Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE), formerly known as MCW Energy Group, Inc., is a diversified Canadian energy company, which operates a variety of different businesses. Currently, the company has four major businesses/sources of revenue:
- Patented, Proprietary Oil Sands Extraction Technology
- Wardlaw Field Oil Assets in Edwards County, Texas
- Uinta Basin Oil Sands Assets in Utah
- 46% Ownership in Accord GR Energy, Inc., and E&P company
Among the company’s businesses is the manufacturing and development of their patented, proprietary oil extraction technology, which can be used for oil sands, shale, and shallow oil deposits. However, unlike traditional oil extraction methods, Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE)’s technology is centered on environmentally friendly application and efficiency. The proprietary technology does not use water, produces zero greenhouse gas emissions, extracts 99% of hydrocarbon contents and able to recycle 99% of benign solvents. Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) has worked with well-known engineering firm, Chapman Engineering Company, and environmental impact consultants to ensure the integrity of the proprietary oil sands technology.
Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) has acquired a 46% interest in Accord GR Energy, Inc., an exploration and production company based in Houston, TX. Accord GR Energy, Inc. holds a unique gasification technology that Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) not only wants to acquire, but also uses across its other businesses as well. Overall, Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) maintains a stake of 46% in Accord GR Energy, Inc., which will also serve as a cash flow generator for the company.
Accord GR Energy, Inc. holds a 7,000-acre mineral lease at the Wardlaw Field, located in Edwards County, Texas. The oil field has an extensive history of over 139 wells, including 90 that belong to Accord GR Energy, Inc. and Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE). These companies are among the very first to be able to take advantage of the shallow oil field, which has plagued other oil producers, large and small.
Aside from the company’s oil technology business, Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) has an 1128-acre oil sands lease on Asphalt Ridge. located in Utah’s Uinta Basin, which is one of the state’s eight largest oil sand reserves. Currently, the company’s production facility is 125 miles away from Salt Lake City and five oil refineries. However, Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) is moving to a larger facility which will allow the company to expand its daily oil production from 250 barrels of oil to over 1,000 barrels per day.
PQEFF/PQE: First Oil Sold From Wardlaw Field
The Wardlaw Field in Texas is known for being extremely shallow and flowing with heavy oil deposits. Over the course of the oil field’s history, many large and small oil producers have attempted to extract the shallow, heavy crude, but never with any success. After millions of dollars were wasted, many industry experts believed the oil field would be impossible to recover.
Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) and Accord GR Energy, Inc. are among the first to fully take advantage of the shallow oil field. Using patented S-BTF and SWEPT extraction technologies developed by Galex Energy Corporation, the company can produce oil at a cost of under $10 per barrel, compared to older steam injection methods, which can cost producers up to $50 per barrel. The technology not only allows for the environmental extraction of shallow crude, but it also costs significantly less than industry averages. With oil prices continuing to hover around $40-50 per barrel, keeping costs low has never been more important.
On June 10, 2017, Accord GR Energy, Inc. and Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) announced its first sale of oil produced from the Wardlaw Field. This not only shows that the joint venture’s operational plans are feasible, but potentially very lucrative.
PQEFF/PQE: Industry and Financial Analysis
Now turning to Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE)’s financial and industry analysis, the company maintains a market cap value of $13.08 million, from 39.35 million shares outstanding as of July 2017. During the last fiscal quarter ending on May 31, 2017, Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) did not report any revenue, as the company was preparing to launch oil operations at the Wardlaw Field. However, the company did list total assets at $29.59 million, total liabilities at $9.47 million, and total shareholders’ equity came in at $20.12 million during the fiscal quarter. Shareholders’ Equity grew from $9 million last fiscal quarter to $20.12 million this quarter, as debt conversions grew.
The devastating decline in oil prices over the past couple years has forced the oil industry into a tailspin. While the overleveraged oil firms go out of business, others like Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) have managed to survive and are now positioned to thrive. Focusing on innovation within oil technology will greatly help the company diversify its business and decrease oil price risk. With that in mind, here are five oil and oil-related companies worth taking a look at with regards to a fair valuation for Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE):
BioLargo, Inc. (OTCQB: BLGO) is a sustainable science and technology company that helps focus on creating a healthier and safer environment. Within the company’s services, they offer remediation solutions to the oil & gas industry. As of July 2017, BioLargo, Inc. had a market value of around $46.55 million. Furthermore, the sustainable science company has a share structure consisting of 200 million authorized shares, 99.04 million shares outstanding, and a float of 65.56 million shares, as of May 2017. During the first quarter 2017, BioLargo, Inc. reported total revenue of $46,000 and a net loss of $2 million.
Basic Energy Services, Inc. (NYSE: BAS) is an oil well service company that operates in the United States. The company provides a variety of different oil well services, including completion and remediation services. As of July 2017, Basic Energy Services, Inc. maintains a market cap value of $619.33 million, 26 million shares outstanding, and a float consisting of 15.53 million shares. During the first quarter 2017, the company reported total revenue of $182.02 million and a net loss of $38.63 million.
Clean Harbors, Inc. (NYSE: CLH) is engaged in providing environmental, energy, and industrial services. The diversified company offers a wide range of services from environmental and remediation solutions to lodging and oil services. As of July 2017, Clean Harbors, Inc. has a market cap of $3.3 billion, shares outstanding of 57.21 million, and a float consisting of 51.98 million shares. During the first quarter 2017, the company reported total revenue of $688.94 million and a net loss of $21.39 million.
Canadian Natural Resource Ltd (USA) (NYSE: CNQ) is an independent oil & gas company, which focuses on exploration, development, production, marketing, and sales. Amongst the Canadian company’s energy projects is oil sands production. However, it is important to note that Canadian Natural Resource Ltd uses traditional oil sands methods that contribute to pollution and other environmental hazards; just like the vast majority of other oil sands producers. As of July 2017, Canadian Natural Resources Ltd has a market cap value of $34.07 billion, 1.12 billion shares outstanding, and a float consisting of 1 billion shares. During the first quarter 2017, the Canadian energy company reported total revenue of CAD 3.64 billion and a net income of CAD 245 million.
Chevron Corporation (NYSE: CVX) is a major integrated oil company, which operates both an upstream and downstream business. Among the other interests that Chevron Corporation holds is large projects and stakes in oil sands and shale oil across Alberta and British Columbia. As with Canadian Natural Resource Ltd and other oil sand producers, their standard operating procedures are under fire for the environmental impact they leave behind. This is where oil sand producer can benefit from Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE)’s patented oil technology. As of July 2017, Chevron Corporation has a market cap value of $204.84 billion, 1.89 billion shares outstanding, and a float consisting of 1.89 billion shares. During the first quarter 2017, the integrated oil giant reported total revenue of $31.52 billion and net income of $2.68 billion.
Overall, Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) is a well-diversified energy company that is positioned for a strong 2017. With less exposure to the underlying price of oil, the company is able to help calm shareholder fears and focus on their impressive oil extraction technology. In addition, the company is entering the next stages, as revenue begins to be generated on a regular basis. Petroteq Energy, Inc. (OTCQX: PQEFF) (TSXV: PQE) is well diversified and well positioned to prosper in the years ahead.