Valkor Project Update

Quadrise PLC

29 August 2023

 

29 August 2023

Quadrise Plc
("Quadrise" or the "Company")

Valkor Project Update

Further to the announcement on 24 August 2023, Quadrise Plc (AIM: QED), the supplier of innovative energy solutions for a cleaner planet, provides an update on its project with Valkor Technologies LLC ("Valkor") in Utah, USA.

As announced on 12 June 2023, Quadrise and Valkor signed a Site Licence Agreement ("SLA"), conditional on receipt by Valkor of drilling and underground injection permits for the Primary Project Site ("PPS") from the Utah Board of Oil, Gas and Mining (the "Board") and upon the receipt by Valkor of project financing in an amount of at least US$15 million.

Valkor's pilot development programme was approved by the Board in December 2022 on standard 40 acre spacing, and Valkor has been conducting field surveys and other tasks required for the completion of permit applications. The drilling permit is expected by Valkor to be issued by Utah's Department of Oil, Gas & Mining ("DOGM") in early September 2023, with drilling scheduled by Valkor in October 2023. Upon issue of the drilling permit, Valkor can file Underground Injection Control ("UIC") permit applications for the injection of steam to stimulate the drilled wells. DOGM has estimated UIC approvals will take approximately 8 weeks in accordance with the schedule for Valkor's planned October drilling. Under the current Board approvals and following the issue of the drilling permit, Valkor is able to drill up to 12 wells under the pilot development plan.

Separately, Valkor is seeking 2.5 acre down-spacing of the wells (compared with the standard of 40 acres) to allow drilling of 111 wells within the same area. Based upon advice received, Valkor sought a hearing for a unitisation plan, treating the pilot area as a single unit with revised spacing as desired by Valkor ("Unitisation"). At the recent hearing on 23 August 2023, the Board did not grant the Unitisation but instead requested that Valkor drill at least one pilot well and update the plan using the data from that well before seeking approval again. Unitisation by Q1 2024 will be targeted, to stay on schedule for the full development plan of 111 wells.

Valkor has advised Quadrise that the Board ruling of 23 August 2023 does not impact the PPS development plan and has confirmed that Valkor's financing is not dependent upon UIC or Unitisation approvals. With the drilling permit condition now in hand, Valkor and Quadrise have agreed under an addendum dated 25 August 2023, that the SLA is now only conditional upon the receipt by Valkor of project financing in an amount of at least US$15 million.

Valkor is continuing to work with Heavy Sweet Oil LLC and AC Oil LLC to secure the required project financing to establish the Asphalt Ridge Enhanced Recovery Unit for the in-situ production of heavy oil, and to licence Quadrise's technology for the agreed sum of US$1.5m (comprising US$1m upon satisfaction of the financing condition and US$0.5m on the date on which a Quadrise MSAR® Manufacturing Unit and associated equipment are delivered to the Primary Production Site).

A further update will be provided upon conclusion of Valkor's project financing and subsequent award by Quadrise of the conditional site license to Valkor.

Steven Byle, CEO of Valkor commented:

"Whilst the unitisation decision by the Board on 23 August 2023 was disappointing, it was understandable, and we had scheduled the hearing well ahead of our project requirement for down-spaced pilot wells to be drilled. Our pilot development project is unaffected, and our plan is to proceed with the drilling programme under the current Board approvals. The wells will evidence the substantial heavy oil deposits surveyed in the area and support our further unitisation application early next year. We look forward to securing funding with our project partners during the coming weeks and to working with Quadrise to implement its unique technology in Utah to produce lower carbon fuels in the near future."

Jason Miles, CEO of Quadrise added:

"We are delighted that Valkor and their partners are commencing heavy oil drilling activities in Q4 2023 and working towards the conclusion of project financing arrangements. The Quadrise team are looking forward to working with Valkor in Utah to support the project and to deliver sales of MSAR® and bioMSAR™ fuels produced from lower carbon heavy sweet oil."

For additional information, please contact:

Quadrise Plc		[phone]
Andy Morrison, Chairman Jason Miles, Chief Executive Officer
Nominated Adviser
Cenkos Securities plc		[phone]
Ben Jeynes
Katy Birkin
Joint Brokers Shore Capital Stockbrokers Limited		[phone]
Toby Gibbs, Rachel Goldstein (Corporate Advisory)
Fiona Conroy (Corporate Broking)
VSA Capital Limited Andrew Raca (Corporate Finance) Andrew Monk (Corporate Broking)		[phone]
Public & Investor Relations
Vigo Consulting Patrick D'Ancona Finlay Thomson		[phone]

About Quadrise

Quadrise is the supplier of MSAR® and bioMSAR™ emulsion technology, fuels and biofuels, providing innovative solutions to reduce energy costs and greenhouse gas emissions today for clients in the global power generation, shipping, industrial and refining industries.

Learn more at: www.quadrise.com

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR") and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

 

END