LONDON, December 1, 2017 /PRNewswire/ --
In the twentieth century, fossil fuels powered the industrialization, urbanization and modernization of the global economy. Societies transformed. The world was connected. Wealth increased tenfold.
Now, in the twenty-first century, as revolutionary technologies disrupt moribund industries at lightning speed, knowledge is the new source of power. Included in today's commentary: Whiting Petroleum (NYSE: WLL), Helmerich & Payne (NYSE: HP), BHP Billiton Ltd. (NYSE: BHP), Anadarko Petroleum (NYSE: APC), Pembina Pipeline Corp. (NYSE: PBA)
New technologies have enabled drillers in the Permian Basin to pump more for less, while technicians in Houston can monitor rigs hundreds of miles away with just the click of a mouse.
Just like Google revolutionized the internet, the world of oil production could be about to be transformed by a small company with a revolutionary technology. Armed with blockchain-based tech, led by a team of qualified energy professionals, and poised to take advantage of a sea of oil locked away in Utah, Wyoming and Colorado, Petroteq Energy (PQE.V; PQEFF) shows strong potential to disrupt energy in a big way.
Petroteq's proprietary technology can turn capex-heavy oil sands profitable at around $20 per barrel, and its use of blockchain tech and emphasis on third-party licensing should bode well for profits amidst rising global demand.
If 2017 was the year of the Permian Basin - a bonanza for U.S. shale producers - the next few years could see a revolution in energy production in "dry sands" oil fields in Utah, Wyoming and Colorado, and companies that know how to tap into these new resources will dominate.
Investors seeking prime energy stocks might want to spend a few moments looking at Petroteq.
Here are five things you need to know about this hot new energy influencer:
#1: Licensing Fees for Big Earnings
Unique tech demands a premium from whoever wants to use it. When demand spikes, Petroteq's unrivaled tech will be superbly positioned to license its methods to third parties.
Petroteq's (PQE.V; PQEFF) focus: oil sands. Normally, drillers use water to crack open oil sands deposits, leaving toxic pollutants behind. Because of all the equipment involved and the high environmental cost, oil sands is one of the dirtiest and most expensive fossil fuel sources. The "wet sands" of Canada, the largest oil sands deposit in the world, is dirty and non-competitive at today's prices, forcing Shell and other majors to divest from the tar sands altogether.
Here's where Petroteq steps in, with a brand-new method for extracting oil sands, leaving little to no ecological impact and generating zero greenhouse gases. Rather than wet sands, Petroteq goes after "dry sands" deposits that can be reached quickly, reducing the risk of a dry well
The company's proprietary method can produce a barrel of oil from dry sands for $22, a far cry from the high breakeven costs of the Canadian tar sands.
Plus, blockchain technology developed in-house allows the entire process to be monitored step-by-step, reducing costs and boosting efficiency.
These technologies will be critical for the next phase of the North American energy revolution. The oil sands of Utah hold 32 billion barrels of oil equivalent, in 8 major deposits. Only a few companies have successfully marketed Utah oil sands, as production and transportation costs have been too steep.
But Petroteq's proprietary methods should make breaking into the Utah fields far easier, while the low production costs should translate into high profitability.
The company has already proven it can produce Utah oil effectively. It took over the Asphalt Ridge plant and produced 10,000 barrels in 2015. Next year, Petroteq plans to tap into the field's 30,000 bopd of proven reserves, producing at only $23 per barrel. It's sitting on top of a field holding 87 million barrels of oil equivalent.
The company could be about to make a killing from licensing its tech to other producers. As demand for heavy oil increases, drillers will begin exploiting the immense reserves of accessible oil sands throughout the world.
How big could these licensing fees be? Consider the size of the market: 174 billion barrels in Canada, 21 billion in the United States, some 500 billion barrels worldwide.
And we are not aware of anyone who can access these reserves at $20/barrel without Petroteq's proprietary tech.
With WTI hovering near $60, and with $70 not too far away, the potential for Petroteq to earn billions per year in licensing fees is very real.
#2: Blockchain Technology
The building block of the cryptocurrency economy, Blockchain technology has the capacity to make energy trading and energy production faster, more efficient and easier to trace.
It's already attracted the attention of the majors, and Petroteq intends to make it a central component of its strategy.
It basically functions as a way of ensuring secure transactions between partners without the need for a verifying third party overseeing the transaction. It's used in the bitcoin world to act in place of banks or other third parties.
Petroteq (PQE.V; PQEFF) has signed an agreement with First Bitcoin Capital, a blockchain development and crypto-currency firm, and has also been working with IBM to bring its oil field operations in line with big data.
Its partnership with First Bitcoin Capital, gives Petroteq the credibility it needs to realize its ambitions. With Bitcoin trading for more than $11,000 per coin, up from just a few hundred a few years ago, the capacity for realizing huge gains is pretty extraordinary.
Bottom line: Licensing this technology could make Petroteq the biggest name in upstream and downstream operations.
#3: Demand Going Sky High
Oil from dry sands is heavy, as opposed to the light crude that comes from the shale fields of the Permian.
But with the United States poised to launch a major infrastructure development plan next year, demand for heavier crudes is set to skyrocket. The Trump administration wants to spend $1 trillion revamping American roads, bridges and freeways, and it will need millions of barrels of heavy crude-crucial in the production of asphalt and other building materials-to do it.
Heavy oil refineries are poised to take in more crude, and discounts for heavy blends are disappearing as the market tightens.
Petroteq should be well situated to feed this demand growth. By licensing its technology to third parties, it could realize revenues and quick growth with little or no capital expenditure, fostering big profitability and strong investor return.
Then there's the price of oil, which has been slowly ticking up in recent months, thanks in part to spikes in geopolitical risk. Disturbing trends in Saudi Arabia, such as the mass arrest of dozens of Saudi princes and businessmen, indicate that all is not well in the world's number-one oil exporter.
Then there's Venezuela, where chaos could trigger a supply cut-off, sending prices skyrocketing.
Current prices, hovering between $55 and $60, could jump as high as $80 next year. Supply shocks in Latin America or the Middle East could send prices even higher.
Investors who want to take full advantage of this energy revolution-the most dramatic shift in global energy since the discovery of the Middle East oil fields in the 1940s-are licking their chops.
#4: Dream Team
As Petroteq positions itself as the Google of energy, it's snapping up the best talent and focusing on applying its technology through aggressive, active leadership. CEO and chairman Aleksandr Blyumkin is so confident in the company that he's pumped millions of his own money to expand its presence, including providing an interest-free loan to grow production from Petroteq's facility at Temple Mountain, Utah.
The Petroteq ethos of innovation and daring is personified by CTO Dr. Vladimir Podlipskiy, a pioneer of oil sands extraction technology with a ton of patents to his name. No one alive knows more than Podlipskiy about how to extract oil from oil sands, a tricky and potentially expensive process that he has mastered.
#5: A Licensing and Technology-Driven Juggernaut
Petroteq's (PQE.V; PQEFF) products and technologies firmly place it at the forefront of some of the hottest trends in the market. It can unlock billions of barrels of previously-untapped heavy oil at a fraction of the cost of other firms, just as demand is set to spike with American infrastructure projects and tightening global supply of heavy crude.
But what truly sets this company apart is its mastery of information.
Every upstream developer hungry for Utah oil sands will turn to Petroteq's proprietary tech to unlock reserves. Other companies eager to cut costs and streamline operations will use the company's blockchain data service to cut out the middlemen.
Other companies to watch:
Whiting Petroleum (NYSE: WLL) Whiting is big in the Bakken, but it's been hit harder than most, so it's a great time to buy. It took on a huge chunk of debt right when the oil price collapse happened, when it bought out rival Kodiak Oil and Gas for $6 billion. But since then it's been improving its balance sheet and cutting costs to manage low oil prices. It's work in that area has been impressive.
Helmerich & Payne (NYSE: HP) is a petroleum contract drilling company based in Tulsa. The company has been in operation since the 1920's so it has definitely seen oil prices rise and fall, remaining resilient the years. The company's FlexRigs have changed the face of shale drilling.
BHP Billiton Ltd. (NYSE: BHP) This giant not only mines metals, it also extracts oil and natural gas and has a diverse set of assets to that end in the Gulf of Mexico, Australia, Trinidad and Tobago. Beginning its operations in the 1800's, BHP is a well-known name in the resource industry. With headquarters based in London and Melbourne, BHP's global presence is will accounted for.
Anadarko Petroleum (NYSE: APC) became the first major shale company to cut spending in response to the most recent downturn in prices. Unlike some of the other picks on this list, Anadarko is a more conservative choice based on preserving cash flow and reducing expenditures.
Pembina Pipeline Corp. (NYSE: PBA) The North American pipeline industry has had a tough year, but the recent approval of the Keystone XL pipeline route and the growing need for transportation capacity should act as a boon for the sector.
By. Charles Kennedy
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