Valuations of oil services and oil tech stocks are on the rise
USA News Group – In response to the global energy crisis, the Biden administration is selling a record amount of emergency oil from US national reserves to bring soaring fuel prices under control. Despite these efforts, there is growing skepticism about whether unconstrained US gas production can sustain itself. However, due to roughly $100 worth of oil and large gaps in renewable energy, fossil fuels remain crucial to the western way of life. Demand continues to outpace production, driving the market to seek out major oil developers and new technologies to fill the void. According to Baker Hughes Company (NASDAQ:BKR), the number of drilling rigs in the United States has been steadily increasing, which means that the domestic market is quite active. Examples of increased domestic action include new developments from other oil service and technology companies such as Petroteq Energy, Inc. (OTC: PQEFF), Enservco Corporation (NYSE: ENSV), Halliburton Company (NYSE: HAL), and Schlumberger Limited (NYSE: SLB).
Among the latest technologies being developed that could have a huge impact on U.S. production is the Clean Oil Recovery Technology (CORT) process, developed by Petroteq Energy, Inc. (OTC:PQEFF) and proven to produce oil from oil sands without using water, producing wastewater or tailings ponds.
“Confirmation that heavy oil extracted from the Utah oil sands using our CORT process is suitable for the production of MSAR® and bioMSAR™ fuels could enable the production of fuels and biofuels with significant environmental benefits, while creating a higher value-added product stream for by Petroteq future commercial production,” said Vladimir Podlipsky, by Petroteq CEO and CTO.
With this proprietary oil extraction and remediation technology, petroteq updated and completed the design of a planned oil sands extraction plant capable of processing 5,000 barrels per day with Valkor, LLC.
In July 2019, Valkor signed a technology license agreement with petroteq and operates out of the Utah plant, under a master service agreement signed in November 2018.
Following the original Front End Engineering and Design (FEED) update, Valkor conducted various complementary design studies to prepare the final engineering plans.
A major part of the process included a design study with MI SWACOwhich is a subsidiary of Schlumberger Limited (NYSE: SLB), for the main processes of separation and drying of sands destined for resale.
The CORT system uses a conventional sand dryer modified for service with closed loop petrochemical solvents. A combination unit was offered as a turnkey system to process up to 8,000 tons of sand per day with an EPA Tier 1 quality target for the resulting sand.
Back in February petroteq announced a third-party cash flow analysis broadlandswhich showed a base case scenario of net present value (NPV) of $1.285 billion, $602 million and $341 million, on a pre-income tax basis, at rates of discount of 0.0, 7.5 and 15%, respectively.
This economic analysis by CORT focused on the markets available for the sale of the three categories of derived sands. Broadlands noted that an extraction plant producing 5,000 bpd could (according to estimates by petroteq) be capable of producing 6,000 tons of sand per day or 1,860,000 tons per year (based on 310 days of operation per year and operating 24 hours a day), and that silica flour is assumed to be 15% of the salable product , 55% frac grade sand and 30% bulk sand.
The economic outlook of the entire process has attracted interest from ESG-focused investment firms Viston United Swiss AGwho is trying to take over.
Viston’s introduced to petroteq shareholders a valuation premium of approximately 279% to the closing price of the common shares on the TSX Venture Exchange on August 6, 2021 and a premium of 1,032% to the 52-week volume-weighted average trading price on the TSX-V prior to the offering originally made in April 2021, before the Canadian equities halt. The offer itself is valued at a considerable premium to the market price, with an all-cash consideration of C$0.74 per common share.
Meanwhile, through its U.S. shares on the OTC under the symbol PQEFF, shares of petroteq are trading around US$0.395 (CA$0.505) on April 11, 2022. At this price, CA$0.74 (US$0.59) still represents a potential 49% premium to the more current trading price .
“Our advancements in engineering work illustrate our intentions to continue to operate the company for future expansion and revenue growth regardless of the ongoing offering of Viston United Swiss AGadded Podlipsky. “Management will continue to conduct business as usual and will do everything possible to improve shareholder value.”
Until now, Viston’s the offer was favorably received by all petroteq team, with the unanimous intention of offering shares of the board of directors, the company’s founder, former president and chief executive Alex Blyumkin, and one of the company’s major shareholders, Cantone Asset Management, LLC.
Since February 18, 2022, the shares of Enservco Corporation (NYSE: ENSV) rallied from $0.563 to 667% at $4.32 in March, before settling around the $2 level in mid-April.
Enservco is a diversified national provider of specialized wellsite services to the onshore conventional and unconventional oil and gas industries. Before the energy crisis really took off, the company saw its revenue increase by 72% in the third quarter of 2021, posting gains across all of its service offerings.
“The number of rigs and wells drilled in the third quarter increased by double digits on a quarterly and sequential basis, and these tailwinds should help us maintain our revenue momentum during our fourth and fourth quarter heating season. first quarters,” said Rich Murphy, executive chairman of Enservco.
Three of the largest oil service companies in the world, Baker Hughes Company (NASDAQ: BKR)Halliburton Company (NYSE: HAL), and Schlumberger Limited (NYSE: SLB) have all suspended operations in Russia.
“Safety and security is at the heart of who we are as a company, and we call for an end to the conflict and the restoration of safety and security in the region,” said Olivier Le Peuch, CEO of Schlumberger.
Since the move, analysts at Piper Sandler improved their score on Schlumberger, saying the shares could rise 29%. Analysts at the same company also raised their price target from Halliburtondespite maintaining the same rating, as the company received a consensus recommendation from analysts.
Overall U.S. drilling activity is up for the third consecutive week, according to hugue baker that US drillers reported adding oil and gas rigs.
The number of oil and gas rigs is generally considered an early indicator of future production. hugue baker said it rose from 16 to 689 in the week to April 8, its highest level since March 2020, bringing the total number of rigs to 257 rigs, or 59%, by compared to the same period last year.
According to hugue baker report, more than half of U.S. oil rigs are in the Permian shale of west Texas and eastern New Mexico, where the total number of units this week jumped by nine to 332, the most since April 2020. This jump was officially the largest weekly increase in the basin since January 2021.
Source of the article: https://usanewsgroup.com/2022/03/25/this-quick-turnaround-takeover-is-the-kind-of-play-smart-investors-snap-up-in-a-heartbeat
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