Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
That’s a shame. There was a good debate on MSC, LONO’s and BioMSAR.
On the subject of progress we are at the behest of the client and if they want to take the time to set up the trial to assess BioMSAR before MSAR then that’s their prerogative.
Similarly in Morocco, OCP dictate the pace. OCP haven’t even confirmed that it’s OCP. We only officially know it’s a Moroccan cement producer.
Utah. They too have fallen under the spell of BioMSAR. A home grown low Sulphur BioMSAR would be quite a proposition to the US market.
BioMSAR has become catnip toour clients.
Mexico; maybe they will keep the faith with full fat MSAR.
I’m sorry for my flippant initial response.
More detail behind my thoughts.
Steve Byle appears to be a big pictures man. I think he has a vision -as stated last August -to realise the hidden value of Utah oil shale that has to date eluded every, and I mean every previous attempt to make it pay.
In simple terms, Utah crude oil bitumen SynBit derived from its tar sands will never pay in its raw form as it is just not valuable enough. It needs upgrading. Conventional upgrading methods require multi billion dollar hydro crackers. MSAR requires an MMU.
The MSAR price will track the WTI price; but it will always trade at a premium to WTI. Utah SynBit will always trade at a discount.
No refinery is going to sign a 5/10/15/20 year deal to take the Utah SynBit because they don’t have to.
Any investor will look at the Utah track record that has seen oil majors try under the Carter administration, only to pull out when the subsidies were cut by Reagan 10 years later.
Please critique and I’ll do my best to justify my view.
No evidence. But I bet you I’m right.
The Utah/Tomco /Greenfield product is to be MSAR /BioMSAR.
The offtakers mentioned by Tomco in their puff piece ‘interview’ are none other than Valkor.
Valkor are going into the bunkering business.
Valkor are going for vertical integration and multiple profit centres just like the Oil Majors do; from finding and producing from the oil reservoir, through refining and for eventual sale at the filling station.
They have a 13% stake in the patented IP. Petroteq.
They have a 29 % stake in mining and production -Greenfield.
They are the offtakers and they will buy the entire production output and bunker it for sale to marine and power end users.
By the time they’re up and running it’s 2023, the railroad is complete and the MSAR/BioMSAR market will have already been established for them by MSC.
Delays are baked in to all projects and changes to scopes are not necessarily a bad thing.
The Utah testing scope of work extension will I think supplant the MMU on-site trial.
We have not been given news of any project cancellation.
We still have five increasingly interlinked projects on the go.
Utah and MSC are bound by BioMSAR testing.
MSC and OCP ( Morocco) are bound by the MSAR/BioMSAR refiner.
Mexico is bound by the MSC / OCP refiner because they want second place. Pemex didn’t get into its current indebted state by ever being ahead of the pack.
And MSC must be aware that they would be handing back the low Carbon/ zero Carbon initiative to their competitors - Maersk in particular- if they were to cancel the MSAR/Biomsar LONO.
Enlightening that no mention at all was made of the sample tests when the results are so fundamental to Tomco’s plans. I posit that the results were so good that the next step to produce 100 MT of LSMSAR is now under negotiation. QFI are aware of the three weeks Tomco have to raise $1.7 million for 10% of the TSHII licence. QFI have other options. Tomco don’t.
Enlightening that no mention at all was made of the sample tests when -IMHO- the results are so fundamental to Tomco’s plans. I posit that the results were so good that the next step to produce 100 MT of LSMSAR is now under negotiation. QFI are aware of the three weeks Tomco have to raise $1.7 million for 10% of the TSHII licence. QFI have other options. Tomco don’t.
So much for my well crafted theory regards a Tomco RNS before their AGM tomorrow.
There’s still tomorrow morning.
Please use the filter and please don’t reply, no matter how witty. The only way we can keep this BB as an informative exchange of views and ideas is to self police it. They will eventually move on.
From the Government website;
Ing. Norma Rocío Nahle García
Secretary of Energy
At the request of the President of Mexico, Lic. Andrés Manuel López Obrador, on December 1, 2018 she was appointed as Secretary of Energy.
Federal Deputy and Coordinator of the MORENA Parliamentary Group in the LXIII Legislature (2015-2018).
A licensed senator, she was part of the Morena Parliamentary Group from September 1 to November 27, 2018.
She was born in Río Grande Zacatecas on April 14 1964 and is from Veracruz at heart.
She is a Chemical Engineer from the Autonomous University of Zacatecas (UAZ) from 1981 to 1986, with a specialty in Petrochemicals from the same institution.
She completed a diploma in Chemical Engineering of processes from the National Autonomous University of Mexico and a diploma in Economic feasibility in Industrial processes from the Universidad Veracruzana.
She began her career in the Pajaritos, Cangrejera and Morelos Petrochemical complexes of PEMEX, where she worked in the administrative, financial, process, planning and quality control areas. In addition, she has worked in the private sector at Industrias Resistol.
Thanks to Foxm and Vince on the Forum for sharing the PEMEX news. I’m very excited about the statement made two weeks ago by Mexico’s energy minister Norma Rocío Nahle García that ‘the government intends to “phase out” fuel oil production with the reconfiguration of several of its refineries in central Mexico by 2023’.
She’s unusual in that she’s a graduate petrochemical engineer who has become a very senior politician; one down from the President and seemingly on an equal level to the PEMEX chief executive. Was or wasn’t there a PEMEX / Redliner /QFI NDA signed in July?
That makes four and a half project leads;
MSC
Morocco
Utah
Mexico
1/2 -Biomsar engine trials with Aquafuels.
Reasons to be Cheerful, part 3.
Apologies to the late Ian Dury.
Monday or Tuesday next week Tomco should release news of the sample testing results ahead of their Wednesday AGM.
The door is closing on Tomco and they really do need to get a wriggle-on this month.
On 01 September the Tomco RNS update on their Tar Sands Holding II site membership interest stated that they had paid an additional non-refundable $100K to the non-refundable $200K already spent to extend the due diligence period an extra month to 01 October to secure 10% of the membership interest.
The balance of $1.7 million is due by 01 October.
There then exists the option to buy the remaining 90% for $18 million by the end of next year.
Tomco don’t have $1.7 million, let alone $18 million so they need to get the good news out there, and fast.
John Potter will have been given an interim assessment of the Utah SynBit sample testing when he visited QRF on 12 August. The photo showed him flanked by a beaming Jason Miles who looked like he’d lost a penny and found a million quid. John Potter by contrast looked rather more thoughtful, no doubt aware of the converging demands and tightening timeframe facing his company.
If that assessment had been downbeat would John Potter had then chased his losses and committed another $100K to the Tar Sands Holdings II acreage membership?
My hypothesis is based on the premise that LS-MSAR is absolute key to the viability of the Greenfield venture as without it it’s just another Utah tar sands retort method; and a product that will always sell at a discount to WTI. When WTI is ever at $40/bbl or below the SynBit will sell below Greenfield’s break even. Don’t be fooled by runaway sales of clean sand to oilfield frack sand companies to balance the books either. In a depressed oil price the first production to be cut is heavy oil. See Canada for details. If they can’t sell the SynBit they can’t produce the clean sand. Frack sand is a science of its own and the market is mature with an established supply.
Company lift-off would be welcome. It makes sense to release this RNS before the good news we're expecting of the MSC LONO trial rather than afterwards as the MSC announcement will have a transformative effect on the sp. 7.5p share options when the sp is 4p is one thing. 7.5p share options when the sp is >10p is another.
Big news is (over)due next week or w/c 13th Sept (Shipping Week) from QFI regards the MSC LONO start date and the refinery partner, plus the start of the Morocco trial. I know QFI have mentioned Norwegian MSAR production for the Morocco trial. I think the MSAR will be ultimately produced by the MSC LONO refinery partner, hence the Morocco delay.
Big news due on sample testing from Tomco ahead of their AGM next Wednesday 8th Sept. I propose that the AGM date was only confirmed on Monday 16 August after John Potter had visited QRF the previous Thursday 12 August when he witnessed tests and received assurances that the testing programme would be concluded by the end of the month.
Please keep the open and informed debate active. Otherwise the BB becomes a GroupThink echo chamber.
I understand your views Salinger. But I respectfully take a counterpoint to them.
Steve Byle let the cat out the bag a year ago;
Steven Byle, Director of Greenfield and CEO of Valkor said:
"We see the MSAR® technology from QFI to provide a real opportunity to take advantage of the huge and unique resource of undervalued heavy sweet and high paraffin oil in Utah. The effective implementation of a commercial MSAR® plant may unlock the economics of heavy sweet crude derived from oil sands as well as high paraffin crude from other sources. We will use this commercial trial to attempt to demonstrate a viable retail product direct from site. We will be seeking markets for this product at a premium above WTI pricing. If successful, this effort could provide outstanding economics for oil sands production through ordinary price regimes while enabling profitability through low or even crisis crude pricing. We will also look at the application to high paraffin crude to allow conventional transport and superior economics."
Utterances since by PQE and Tomco have rowed back from this statement. I don't believe it signifies a change of heart, only a change in negotiation.
"Somebody is about to buy €120 million euros worth of PQE. Nobody does that in my book if the eventual outcome of your investment is tied to an as yet untested non-contractually linked third party technology. Time will tell as they say."
For an oilfield major, £120million of risk assessed capital is equivalent to the cost of drilling a single deepwater (>1,000m water depth) exploration well. It could discover an oil reservoir. It could be a dry hole. The Texas oilfield rule of investment used to be -in rather coarse terms 'get in before the *****s arrive, get out before the sucker rod pumps (the nodding donkeys) are installed'. Someone has done their homework and has run the rule over Petroteq and sees this age old First Mover advantage. Petroteq patented technology is very valuable; but its end product is not. It therefore needs marrying with an equally valuable upgrading technology. The area around Vernal is pockmarked with a century's worth of detritus from previous closed loop retorting attempts to separate oil from the sand. None of them had a bolt-on value add and they failed. LS-MSAR from SynBit is not yet entirely de-risked; but you'd have to agree the probability of a successful transition is more likely than the probability of failure. The production of LS-MSAR from Synbit does not decouple its sales price from the febrile WTI price. But it does shift the LS-MSAR price to the upside of the WTI price.
“I understand your points very well PR. My point is that Greenfield have produced a document detailing cost of production and a product sale price very close to WTI”.
Greenfield can’t reliably and consistently sell their 5,000 daily barrels of 10 API SynBit anywhere near the 40 API WTI price. It’s just not possible to do so.
They might have sold a 250 bbl penny packet to a Nevada based 2,000 bbl/day teapot refinery specialising in road tar production during the summertime road construction season. But that’s not an option with a constant 5-10,000 bbl/day output. That sort of volume has to go to by truck, pipeline or rail to a sophisticated or a tidewater refinery capable of hydrocracking the SynBit and raising its low value into high value motive fuels (jet, petrol, diesel) in the most part.
There’s no reason why the sophisticated refinery would want to or need to pay top dollar 40 API WTI rates for an inferior 10 API product that needs so much more refining and treatment, even if it is low Sulphur.
The nominal $10/bbl transport cost by rail has to be considered too.
At a production cost somewhere in the low $20’s, plus transport, plus profit, the breakeven price for their SynBit is @$40/bbl. Great at the moment. But not so great when it’s not as the SynBit will always trade at a sizeable discount to WTI.
Their FEED would not not be expected to say ‘it’s marginal’. It’s a sales prospectus and caveat emptor principles apply.
Regards the mystery buyer behind the Petroteq share purchase offer. it would not be the first time an oilfield major has acquired a resource though an anonymous front company. BP used the tactic in 1984 when they purchased Furzey Island in Poole Harbour for buttons from Algy Cluff, owner of Cluff Oil. In 1980 Algy Cluff acquired the island as a getaway, ignorant of the underlying resource that was to become the Wytch Farm development; one of Europes largest onshore oilfields.
The PQE process is part of the differentiation from previous failed ventures. But its end product is not worth enough as it needs to be upgraded /cracked into saleable oil products by a sophisticated refinery -see Shell’s Scotford upgrader in Edmonton, Alberta
Until the tests are completed and the 600 bbl of MSAR is produced MSAR is a big unknown. Furthermore the Utah players would not want to declare their reliance on MSAR before its viability is confirmed and before licensing agreements are signed as it would obviously undermine their negotiating position.
I think September could be bigger than that, with Tomco /Greenfield in Utah riding on the coat-tails of the eagerly anticipated news due around Shipping Week that MSC have committed to the MSAR/BioMSAR LONO (with, in’shallah, Shell as their refining partner).
With the MSC confirmation and the immediate wider interest in MSAR and BioMSaR, Tomco will publicise - or will have publicised the results of their SynBit to LS-MSAR sample tests; and will raise funds on the back of MSCs announcement to make the 10% deposit due on their lease by the end of the month -hence the news today of their 30 day lease deposit extension.
MSC will have MSAR and BioMSAR. Tomco will have the low Sulphur MSAR derivative and this is key to Tomco /Greenfield’s market offering. Without it their 5,000 bopd plant has no USP and nothing to differentiate it from all the previous ventures that failed to profitably produce a saleable oil product from Utah tar sands.