Genoil Announces Revised Cost Models, Increased IRRs and Closing of Private Placement
06 Abril 2011 - 5:00AM
Marketwired
Genoil Inc. (TSX VENTURE: GNO)(OTCBB: GNOLF) ("Genoil") has
recently completed a profitability test for a Middle Eastern
client, and is pleased to update its profitability model based on
the significant expansion of profit spreads. The spreads between
heavy oil and light oil have been steadily increasing, which has
resulted in an increase in the profit margins for Genoil's
upgrading business prospects. This will open up additional
opportunities across the US and internationally as well.
In June 2008, prior to the fall of Lehman Brothers and
commodities crash, the spread between heavy oil and light oil was
$30.91 per barrel. Further, the IRR was 44.6% after debt repayment
and 55.3% before repayment.
In November 2010, the spread was $20.54 per barrel with an IRR
after debt repayment of 25.9% and an IRR before debt repayment of
36.3%. This was considerably better than December of 2008 after the
crash, but still significantly below June 2008's numbers.
Finally, in March 2011, the numbers are beginning to return to
June 2008 levels. The spread is $27.39 per barrel, with an IRR
after debt repayment of 39.4% and an IRR before debt repayment of
50.1%.
Genoil's recent client test results are based on feedstock of
100,000 barrels per day (BPD) Heavy Crude Oil (API 15.6), and GHU
product of 91,600 BPD. Additionally, the results assume a bank loan
of $700 million with five years repayment, no interest, income tax
of 0% (assuming they won't charge taxes in the Middle East),
operating cost of $3.23 a barrel based on the GHU zero waste
formula, and a use of 20 years.
On this recent feedstock for a Middle Eastern client, Genoil
IRR's have increased from 25.9% to 39.4% based on the widening
spreads between heavy oil and light oil.
The rates of returns under different scenarios are detailed in
the table below:
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Genoil Model
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Mar-11 Nov-10 Jun-08
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Spread ($/bbl) 27.39 20.54 30.91
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Fixed Cost (MM US$) 700 700 700
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IRR - after debt repayment 39.40% 25.90% 44.60%
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IRR - before debt repayment 50.10% 36.30% 55.30%
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The demand for oil reached 88 million barrels a day in the
fourth quarter based on dynamic Asian demand, the highest demand in
history, and is growing greatly this year with the Japanese nuclear
situation and the Libyan civil war. Irrespective of the latter two
crises, the demand for oil this year should drive oil prices to new
highs, and further widen spreads between light and heavy oil.
Genoil is also pleased to announce that it has closed a
non-brokered private placement, pursuant to which it has issued an
aggregate of 1,575,000 units at a price of US$0.20 per unit to
raise aggregate gross proceeds of US$315,000. Each unit is
comprised of one common share in the capital of Genoil (a "Share"),
and one Share purchase warrant (a "Warrant") exercisable for two
years following the date of issue at an exercise price of
US$0.20.
The common shares and warrants issued in connection with the
private placement are subject to a statutory four month hold
period.
The private placement has received the conditional approval of
the TSX.V. The securities to be issued by the Corporation have not
and will not be registered under the United States Securities Act
of 1933, as amended (the "1933 Act"), or the securities laws of any
state of the United States, and may not be offered or sold in the
United States absent registration or an applicable exemption
therefrom under the 1933 Act and the securities laws of all
applicable states.
About Genoil Inc.:
Genoil is a publicly traded Canadian engineering technology
development company headquartered in Edmonton Alberta, with offices
in Calgary, Sherwood Park, New York City, Constanta Romania, and
Dubai & Abu Dhabi. Genoil offers an array of clean tech
petroleum technologies. Committed to sustainability, Genoil
operates two major research facilities located Canada and Romania.
It owns and operates a world class 10 bpd hydroconversion upgrader
located on 147 acres, complete with independent water electrolysis
unit for high purity hydrogen supply, hydrogen compressor,
electrical substation, fired heater, low-pressure separator for
vapor-liquid separation, and a PLC for automated operational
control in Two Hills, Canada. Genoil's research and development
(R&D) personnel develop cutting edge methods and new
breakthrough patents to find solutions to the world's complex
energy problems. Genoil also owns several patents related the GHU,
its water purification, well testing, sand cleaning technologies,
and environmental remediation, and centrifuge technologies. Genoil
has been successful in patenting these new environmental
technologies and with a most recent patent on its sand cleaning
technology. Genoil's shares are listed on the TSX Venture Exchange
under the symbol GNO, as well as on the OTC Bulletin Board under
GNOLF.
For more information on Genoil Inc. visit www.Genoil.ca.
ADVISORY: Certain information regarding the company, including
management's assessment of future plans, strategic partnerships,
operations, financing outcomes and the ability to negotiate a
definitive agreement on terms acceptable to both parties may
constitute forward-looking statements under applicable securities
law and necessarily involve risks associated with an oil and gas
technology development corporation, including competition from
other technologies and the ability to access sufficient capital
from internal and external sources. As a consequence, actual
results may differ materially from those anticipated. The
Corporation assumes no obligation to update the forward-looking
statements or to update the reasons why actual results could differ
from those contemplated by the forward-looking statements.
Additionally, statements included in this release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve a
number of risks and uncertainties such as competitive factors,
technological development, market demand, and the company's ability
to obtain new contracts and accurately estimate net revenues due to
variability in size, scope and duration of projects, and internal
issues. Further information on potential risk factors that could
affect the company's financial results can be found in the
company's disclosure materials filed on SEDAR at www.sedar.com and
with the Securities and Exchange Commission.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Genoil Inc. David Lifschultz Chairman & CEO (914)
393-5800 DKLifschultz@genoil.net www.Genoil.ca KCSA Strategic
Communications Todd Fromer / Adam Pollack Managing Partner /
Account Executive (212) 896-1215 / 1232 tfromer@kcsa.com /
apollack@kcsa.com
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