5 Jan 2011 11:45
Quadrise Fuels International Plc ("QFI" or "the Company")
Amalgamation of Sparky Energy Corporation and Optimal Resources Inc.
5 January 2011
On 14 June 2010, the Company announced that, resulting from its 19% holding in Quadrise Canada Corporation ("QCC"), it held a 16.4% interest and was the largest single shareholder in Sparky, a new junior oil company formed to utilize novel proprietary Enhanced Oil Recovery ("EOR") technology developed and owned by Quadrise Canada Corporation ("QCC"). QFI also announced on 18 August 2010 that it had invested C$ 1 million to acquire 2 million additional new issue shares in Sparky in a placing which closed on 31 August 2010. This increased QFI's shareholding holding to 17.85%.
Sparky has a 50/50 joint venture ("JV") with Optimal Resources Inc. ("Optimal") itself a producing oil company with secured reserves in the Lloydminster area in Alberta, Canada. This JV combines the assets, resources and expertise of the two companies for the purpose of increasing oil production from the JV's current and future reserve assets, by applying EOR technology licensed to the JV by QCC.
Details of the phased programme to be progressed by the JV were included in the announcement dated 18 August 2010. This programme started with the first pilot oilfield application of the EOR technology during December 2010 which has progressed as planned. While the field programme is still limited, early stage results and findings are generally in line with expectations, supporting the view that selective application of the EOR technology could have considerable commercial potential.
During the last quarter of 2010 the respective boards of Sparky and Optimal considered the merits of progressing from the JV relationship to a full amalgamation of the two companies. This amalgamation became effective on 1 January 2011. The name of the amalgamated company is Optimal Resources Inc. ("ORI") and QFI remains the largest single shareholder in ORI holding 5,682,500 shares representing 9.6% of the shares in issue on completion.
ORI is a specialised oil production company combining the initial oilfield assets and production development capability contributed by Optimal, with the EOR technology and assured QCC specialised support services introduced by Sparky. The progression from JV to amalgamation adds value by rationalising management structure, processes and costs, and by simplifying future asset acquisition and related financing. The exclusive EOR technology license provides ORI with a competitive advantage in expanding its recoverable oil reserve base.
QCC, in which QFI holds a 20.4% shareholding, will benefit directly from the progress of ORI in terms of growth in license and services related revenues.
Commenting on this development, Ian Williams, Executive Chairman of QFI said:
"The amalgamation is a welcome and positive development which has our full support. The new company is uniquely equipped to progress in its specialised field. If results meet expectations, Optimal Resources Inc. may add considerable value to QFI as it grows its resource base and oil production performance."
Enquiries:
Quadrise Fuels International plc
Tel: +44 (0)20 7550 4931
Ian Williams, Executive Chairman
Hemant Thanawala, Finance Director
Fairfax I.S. PLC
Tel: +44 (0)20 7598 5368
Simon Bennett/Katy Birkin