Petroteq Energy Inc. - Initiation of Coverage
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.
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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.
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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.
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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.
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NPV analysis and peer comparisons suggest 191% upside
Our NPV and peer analysis shows the stock trading at a discount. We initiate coverage of Petroteq with a target price of US$3.98 (CAD $4.89) and Conviction Buy stance.
Petroteq Energy has two operations - MCW Fuels and MCW Oil Sands Recovery, LLC. MCW Fuels is a branded and unbranded diesel and gasoline distributor in the western United States. MCW's Oil Sands Recovery, LLC has a environmentally-friendly, proprietary oil sands technology suitable for oil extraction purposes on all type of hydrocarbon deposits (oil wet deposits in the U.S. and water wet deposits as in Canada), and has also been successfully laboratory tested using oil shale materials.
Align Research is a commissioned research company founded in November 2015 in order to provide the under-served smaller company space with high quality analysis. We have an initial focus on the natural resources sector, in which we see significant opportunities given the current once in a generation bear market, however all undervalued small caps (sub £100m) are considered by our team. Align was founded by industry professionals with decades of experience in the stock markets, headed up by highly qualified individuals from both fund management and analytical backgrounds.
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