LONDON (Alliance News) - Quadrise Fuels International PLC Friday noted the fall in its share price and said although the low oil price has affected investor sentiment, the company said its economics are not based on the underlying price of crude and said its operations are still attractive in the current climate.
Quadrise shares were down 6.6% to 14.25 pence per share on Friday morning, bouncing back from a low of 12.5 pence per share, its lowest price since the end of August 2013. On February 5, Quadrise shares opened at 19.00 pence per share and the price has fallen ever since.
"The company notes the fall in its share price today. The collapse in the oil price since the fourth quarter of 2014, and related uncertainty in the energy sector, has clearly affected investor sentiment," said Quadrise. "While this has limited longer term relevance for the leading Quadrise projects and their prospects, this has understandably concerned shareholders."
Quadrise said its MSAR process adds value in refining by replacing high value distillates, mainly diesel, with water and chemicals to create a substitute for heavy crude oil, meaning "the economics are therefore driven by the price difference (spread) between heavy fuel oil and diesel, not by the underlying price of crude oil... Whilst the spread between heavy fuel oil and diesel has narrowed, the economics of MSAR production in qualifying refineries remains sound," it said.
MSAR stands for Multiphase Superfine Atomised Residue, which is a second generation oil emulsified fuel.
Quadrise said it is in advanced discussions with several refineries which are interested in producing MSAR despite the fall in oil prices.
The company also said it could benefit from increased project cancellations and capital expenditure reductions in the oil industry as a reduction in future diesel supply capacity should lead to an increase in the spread between heavy fuel oil and diesel and consequently improve the economics of its production, said Quadrise.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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