Petroteq Energy Inc. - Update Note
Poised for dramatic growth based on the rollout of its patented EOR technology and blockchain for the oil & gas industry
Petroteq was previously known as MCW Energy Group and has disposed of its fuels distribution business to concentrate on a far more compelling opportunity. This is its patented Enhanced Oil Recovery (EOR) technology, which allows oil to be successfully extracted from heavy oil assets, like oil sands, with impressive economics. There are big opportunities in oil sands/heavy oil in the US and at many large-scale oil projects around the world. Projects are crying out for such an affordable proven technology.
Powerful proven clean technology to extract oil from oil sands
The Uinta Basin in Utah represents the largest concentration of oil sands in the US, with more than 30 billion barrels of reserves. Utah is an ideal place for Petroteq to grow by acquiring more leases and joint venture deals on the back of its technology that can really unlock the value in oil sands.
Asphalt Ridge facility planned to boost production to 5,000+ bopd
Proof of concept for the technology was successfully achieved at 250bopd. Now this revolutionary extraction facility is being scaled up as it is moved on to Petroteq’s Asphalt Ridge site in Utah. Here there are 3,000 acres of rich and thick oil sands, allowing 25-30 years of production at 5,000bopd or more
Providing the oil & gas industry with the blockchain solution PetroBloq
Petroteq has teamed up with First Bitcoin Capital to improve the efficiency of oil and gas supply chain management by developing a bespoke blockchain, a move that is likely to attract a lot of attention to the stock.
NPV analysis and peer comparisons suggest over 475% upside
Our NPV and peer analysis shows the stock trading at a large discount to our perceived fundamental worth of US$4.46 (CAD $5.71).
RISK WARNING & DISCLAIMER
Petroteq Energy Inc. (PQE) is a research client of Align Research. Align Research holds an interest in the shares of PQE. For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.
| Year to Aug | 2016A | 2017A | 2018E | 2019E |
|---|---|---|---|---|
| Revenue (US$'000) | 205 | - | 6,890 | 82,300 |
| PTP (US$'000) | (12,092) | (7,940) | (4,960) | 41,200 |
| EPS (US$) | (4.26) | (0.66) | (0.08) | 0.55 |