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Fracking sand sells for more than cement sand.
Local Oil producers won't need to import...
https://www.sltrib.com/news/environment/2018/06/16/utah-drillers-import-fracking-sand-from-wisconsin-but-there-may-a-cheaper-place-to-buy-it-right-inside-the-beehive-state/
Selling the clean sand will be the game changer as all the costs are included in the extraction process to get the oil. The only additional cost for the sand is to transport it for sale. For 10000 bopd=12500 tons per day of mined ore, (2.4m tonnes pa using 320 day operation) of which 60% can be sold as fracking sand or for cement. Cement sand sells at $35 per 3000lbs (1.5tonnes).(https://rockutah.com/concrete-sand) If they could sell at just $10per tonne after transport costs...this would give additional profit of ~$10m to TomCo...Work the numbers, this would rocket the sp...
Valkor also has Coby Crawford working on the Plant
He is CEO, Crosstrails Engineering – (Valkor Subsidiary)
Mr. Crawford has 21 years of diverse experience, primarily in process design, engineering, construction and installation of oil & gas plants and systems. He has started multiple companies reaching over $100M revenue, sat on the Board of the Gas Producers Association, and participates as a board member on the NCEES U.S. Engineering Subcommittee (SPE) that prepares the PET engineering P.E. exam.
• He was most recently CTO and Director of Trailhead Engineering, which grew from zero to $100M revenue within 3 years.
• Previously, Mr. Crawford was CTO and Managing Partner of Audubon Engineering, which he helped start new divisions of and grew to more than 1,000 employees and $300M annual revenue over 6 years.
• He was until recently the At Large Director on the National Board of Directors, Gas Processor Suppliers Association, (GPSA).
Primula...as per my same reply last Friday:
As Per 18Feb RNS:
As at 9th February 2021, the Company had cash of approximately £2.45 million and management's cash flow forecasts indicate that the Group has sufficient funds to meet its currently foreseeable working capital requirements through to at least the end of June 2022.
I know we have radio silence at the moment, but I reckon they are trying very hard to get the right results for the FEED report. if they do, it will be transformational. So at present I am keeping my glass half-full.
I gave a breakdown the other day on the potential sp based on a lot of variables.
I used a spreadsheet to calculate...you can create same and plug in any numbers you like to see the multitude of outcomes. I was basing my numbers on what is put in the public domain.. e.g. Pre-Feed report, oil prices (https://shipandbunker.com/prices/emea/nwe/nl-rtm-rotterdam#IFO380) , exchange rate etc . A forecast oil price (https://tradingeconomics.com/forecast/commodity) ...still makes it viable.
Would welcome any feedback in case I missed something.
Primula - As I said earlier "Funding will come after the FEED report, which is what they are working on at the moment". Given Valkor is involved, is a serial entrepreneur, probably with wide contacts...and with much higher oil prices as at PRE-FEE, I expect debt financing forthcoming with minimal equity dilution. In the meantime they have sufficient working capital as per the RNS.
As Per 18Feb RNS:
As at 9th February 2021, the Company had cash of approximately £2.45 million and management's cash flow forecasts indicate that the Group has sufficient funds to meet its currently foreseeable working capital requirements through to at least the end of June 2022.
vouch...They are only guesstimates...320 days Production vs 365, or 88% utilisation.
Plug all the numbers into a spreadsheet, and play around.
Adjust the variables:
Exchange rate
no of days
Oil price
Cost per barrel
etc etc
You can get many different answers
Choose what you feel are realistic based on current info.
And has anything been missed?
Feedback most welcome.
My calculations included Zero production for 45 days (i.e. only a conservative 320 days pa) or a 88% Plant Utilization rate for maintenance/downtime. They will have 2 x 5000bopd trains...so whilst maintaining 1 plant, the other is still producing.
Yes, the sand could easily multiple the potential upside... (Apart from transport costs it goes straight to the bottom line as it is a by-product of the whole operation):
On November 11th, 2020 – Petroteq announced that assays of oil sands samples taken during a recent survey of the company’s lease properties have been completed. The survey identified three key areas where the oil sands ore appeared to have higher oil saturations than what was previously mined. The areas sampled show very rich oil saturations ranging from 14 to 18 per cent by weight. Ore having an oil saturation of 14 per cent contains roughly 0.8 barrels of bitumen per ton of ore. The area from which the samples were taken is estimated to contain approximately 60-70,000 tons of mineable ore, which is expected to be sufficient to feed the Company’s oil sands plant at Asphalt Ridge (the “POSP”) for over three months at a production rate of 400-500 barrels per day. These areas will be the focus of PQEFF mining efforts during the initial operation of the POSP following its pending restart.
I had a check frack sand prices.
https://ir.smartsand.com/news-releases/news-release-details/smart-sand-inc-announces-third-quarter-2020-results
Using these number Frack sand averages $100 per ton
10000 bopd would require 12500tons of ore mined
60% of the sand can be sold
OIL ORE
Plant 10000 bopd 12500 tons Total Oil & Sand
Frac sand
barrels (MSAR) 15000 7500 60%
$ sale price 54 100
Op Cost (target) 30 0
Gross Profit per barrel/ton 24 100
Revenue per day $360.000 $750.000
days pa 320 320
Revenue pa $115.200.000 $240.000.000 $355.200.000
My calculations show a Potential 7x current sp using conservative numbers. Would welcomely feedback:
03/03/2021
$ to £ exchange rate 1,3979
barrels per day (MSAR) 15.000 (10000BOPD Plant)
per annum (320days) 4.800.000 (88% utilization)
$ Oil Price $54 - IFO380 price below (conservative - not VLSFO or WTI price)
$ Oil sales pa 258.990.450
5% Royalty to Petroteq 12.949.523
QFI Royalty $1 per barrel 4.800.000
gross Revenue $ 241.240.928
Cost per barrel at $30 144.000.000 ($30 - high end)
EBIT $ 97.240.928
Transport Costs $10per barrel 48.000.000
EBIT$ after transport costs 49.240.928
50% to TomCo - $ 24.620.464
Plant cost (TomCo share) 85.000.000 (assume ALL through Debt Financing, and no share dilution)
interest on Plant - 10% pa 8.500.000
DEPRECIATION 10% pa 8.500.000
PROFIT - $ 7.620.464
G&A costs £2.000.000
Tax £0 £19.88m Tax losses at 30/9/2020
PROFIT - GBP £3.451.366
EPS 0,001653 ASSUME ALL WARRANTS +Options EXERCISED
SP - USING PE of 20 0,0331
no. times current SP 7 (current sp 0,00456)
Mkt cap 69.027.310
price VLSFO IFO380 diff WTI
02/03/2021 $471 $395,5 $76 $59,94
per barrel $64 $54
barrels per metric tonne 7,33
https://shipandbunker.com/prices/emea/nwe/nl-rtm-rotterdam#IFO380