By compound investments10 Sep 2021 20:31
Is Petroteq Energy (PQEFF) a buy for 2021?
In May, Petroteq energy soared to highs of ~$0.20 from a price of ~$0.04, representing a near 400% gain. This attracted many new investors, intrigued by the price action and business model of the company. The price action was a result Uppgard AB (acting as a middleman) offering 0.48 Euro per share to purchase 200 million shares of Petroteq. The clarify, this offer was made directly to shareholders (holding a minimum of 1,000,000 shares). Although this offer led to substantial price action, relative to the offer shares remain highly undervalued.
Why is this? The simple fact remains; much of the market is uncertain whether the offer is serious or will be followed through. Furthermore, the credibility of the offer is often questioned as people wonder, “if I can buy shares on the open market and sell it to them, why don’t they just buy it on the open market?” For one, it would drive the share price incredibly high. As well, it would simply take too long, or simply be impossible due to such low volume.
Since then, other entities such as Balmoral investments LTD have offered to purchase shares for 0.66 Euros ($0.78) for transactions over 1.5 million shares (offer adjusted to a minimum of 550,000 shares). Relative to current levels, this represents an increase of 6-7 times. Note, this offer has only been available for EU investors. Due to regulatory issues, it is not yet available for US investors. According to an Uppgard Konsult AB update from June, “The client and the company are now evaluating the official expansion of the offering to the North American market.”
This being said, the value of Petroteq Energy does not in any way hinge on the credibility of these offers. If they both prove to be insincere (which appears unlikely), the company remains exceedingly undervalued.
What are oil sands?
The idea of separating oil from tar sands is not a new concept. In fact, “the oil sands of Alberta have only been developed commercially since the late 1960s” However, the process has proven incredibly environmentally harmful (not to mention low margins).
“Tar sands oil — even the name sounds bad. And it is bad. In fact, oil from tar sands is one of the most destructive, carbon-intensive and toxic fuels on the planet. Producing it releases three times as much greenhouse gas pollution as conventional crude oil does.”
Is this true for Petroteq as well? Will they get push back from environmental groups? No, quite the opposite. In fact, Petroteq brands themselves as a sustainable company, putting “the environment first”. How is this possible? To quote PQEFF’s website,
“We produce oil without any significant waste, emissions or water use. We have removed the unwanted externalities from oil production that can be seen in other oil sands operations, fracking, and even conventional wells. So instead, our process LOOKS MORE LIKE REMEDIATION of oil-bearing near-surface sands that are cleaned
Sign In
Follow the stocks
