Riding high on its first clean oil sands project at Utah’s Asphalt Ridge, MCW Energy Group (traded in the US under MCWEF and in Canada under MCW.V) has now closed another key acquisition that will give it ownership of oil sands deposits and a place to build a much larger extraction plant as the company moves quickly to consolidate its unique position in this market.
MCW Energy is changing the way people view oil sands with a breakthrough, commercially viable technology that is cleaning up Utah’s tens of billions of barrels of oil sands without creating the toxic wastelands that have resulted from oil sands projects in Western Canada. And they’re doing it at a cost that can still turn a profit in today’s oil price slump.
The breakthrough technology uses a solvent that pulls the oil out of oil sands in much the same way that soap washes grease from plates, according to MCW CEO Dr. R. Gerald Bailey, former Exxon (NYSE:XOM) president of Arabian Gulf operations. Once the oil sands are washed with the solvent, they come out 99 percent clean before being returned to the earth. The process is not reliant on water, high temperatures or pressures, nor does it emit any greenhouse gases.
At Asphalt Ridge, in the heart of the western Green River Formation, MCW has been cleaning Utah’s oil sands and selling it off since the beginning of this year. Asphalt Ridge alone is believed to hold some 1 billion barrels of recoverable oil, and MCW’s plant here is producing 250 barrels a day right now at a reasonable $30 per barrel.
Now MCW is taking operations further, with the 8 September 2015 announcement that it closed the acquisition of TMC Capital, LLC. This deal gives MCW an oil sands deposit lease called the Temple Mountain Project, which will supply more oil sands for Asphalt Ridge and also serve as the location for the company’s next extraction plant—a much larger version that will further drive down production costs.
10 Reasons to Watch MCW Energy
1. Profit, profit, profit
MCW’s ground zero plant at Asphalt Ridge is already producing 250 barrels a day at $30 per barrel, but this is only the beginning. From ground zero we go to their second location, which they’ve just secured, and this will be a much larger plant that could bring costs down to $20 per barrel. These are solid prices even in this depressed oil market, and when oil prices start to climb again—this will be a black gold mine. While shale producers are taking a nose-dive in the market, experts estimate that production using this new technology in Utah is more profitable than shale oil currently being produced, and more profitable than any other oil sands project in North America. It costs about $55 per barrel to produce oil sands in Alberta, compared to Asphalt Ridge’s approximately $30 for clean oil sands. We could even be looking at a shift in focus to clean oil sands and away from Utah’s more expensive-to-produce shale, which had earlier attracted major players such as Marathon Oil (NYSE:MRO), EP Energy Corporation (NYSE:EPE) and Newfield Exploration Co. (NYSE:NFX).
2. Utah, this is the place to be
This is a great location for MCW to have launched its breakthrough oil sands extraction technology. Utah is sitting on an estimated 32 billion barrels of oil sands, while Asphalt Ridge alone is believed to hold around 1 billion barrels of recoverable oil.
3. Better than Alberta
This prospect is far better than Alberta from an environmental and production standpoint. The MCW process does not use any water and produces no waste or pollutants. This means everyone’s onboard. This is important in Utah, where protests against the industry are mounting. MCW stays clean. The oil sands are different in Utah, which is part of the key attraction here. The Utah sands are oil and not water-wet and they can simply be scooped up with a front loader and then processed with the MCW solvent. The oil separates out and the clean sand is returned to the ground. This means no toxic trailing ponds and no environmental mud-slinging.
4. Ahead of the New Technology Curve
The savvy investor these days is looking at innovative companies that can actually bring a new technology to market and are de-risked in terms of environmental impact while already commercially viable—and profitable. This simple new technology checks all the boxes, so it has quite a future. And the future, as most have accepted by now, must take the environment into account or it will nose-dive.
5. This goes beyond the oil, to include other money-making applications
This isn’t just a money-making, clean oil sands extraction technology—it also has huge potential in remediation. If this had been around and in commercial use during the Deepwater Horizon disaster, it could have helped clean up the beaches. And its remediation/clean-up applications could have global reach, so the sky is the limit in terms of potential. There also another spin-off business here in the form of selling the cleaned sand as frack sand.
6. Steady, forward progress that impresses shareholders
So far, MCW has accomplished everything it promised its shareholders in a steady progression of on-target goals. The Asphalt Ridge plant has been a significant success, and the promise to build another plant—a much larger plant to drive down production costs even further—is now being realized with the acquisition of the Temple Mountain Project.
7. New acquisition of prime oil sands land
MCW’s acquisition this month of TMC Capital LLC for $10 million is the next major step forward. This gives MCW ownership of the lease at the Temple Mountain Project and the oil sands deposits there, which it can process at Asphalt Ridge. We’re looking at 2,230 acres here in Uintah, Utah—an area with extensive oil and gas operations by some major drillers. Initial bitumen in place here is 139,541,000 STB.
8. Sky’s the limit once MCW starts licensing their tech
In addition to their own plants, MCW plans to offer the technology for licensing and for joint venture opportunities, so this could easily go global. It could provide a profitable oil extraction process in such places as Russia, China, Afghanistan, the Dominican Republic, Namibia, Jordan and Trinidad—all big oil sands venues with whom MCW is discussing potential.
9. A hot deal while it’s still under the radar
The race to capitalize on Utah’s vast oil sands resources is on, but there’s only one player here who is financially and environmentally clean. That means only one player that can survive in today’s market. Right now, this innovative new tech is still flying under the radar, which means it could still be a good deal for investors—but once they start licensing, it’ll be tough to get in on this game.
10. Listen to the Big Boys
If the former Exxon president of Arabian Gulf operations—Dr. Bailey--thinks this is the hottest thing since fracking technology, we are inclined to listen. More than a few eyebrows should have been raised when he became the CEO of MCW. Bailey recognized a technology that nobody else had; he also was sure it’d make a huge splash on the global oil scene, and once the floodgates are opened, he’ll probably be right. It is, after all, a national and historical first.
By James Burgess of Oilprice.com
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