CALGARY, AB, - Petrosonic Energy Inc. (OTCQB: PSON), an emerging leader in heavy oil upgrading and related technologies, announced today that it has completed an equity financing of $3.1 million with a group of strategic retail and institutional investors.
"Our original goal was to raise $1.5 million," stated Petrosonic CEO Art Agolli. "However, interest in the offering was much greater than we anticipated, which we believe is a reflection of the tremendous enthusiasm with which investors view our company and our business strategy going forward," Mr. Agolli continued. According to Agolli, this financing will allow the company to begin full-scale production at its emulsification unit in the coming weeks. The Company believes that it should begin generating revenue from emulsion processing in the current quarter.
"Most importantly," Agolli said, "we anticipate the completion and start up of our commercial scale upgrading facility, using our proprietary Sonoprocess(TM) technology. This technology has generated considerable interest from prospective customers, investors and partners based on demonstrations of the process operating in a batch mode at our pilot scale upgrading facility."
The Sonoprocess(TM) plant is located in Fier, Albania and will have the capacity to treat up to 1,000 barrels a day of heavy oil. With significant heavy oil production growth anticipated from the 8 billion barrels of oil reserves in Albania, Petrosonic expects to expand its facilities over the next 3-5 years to 15,000 bopd as Albanian oil production increases.
The Sonoprocess(TM) system uses low-frequency, high amplitude, high energy acoustic waves to separate the heavy oil so that the heavier fractions containing asphalt, sulfur and heavy metals can be easily removed, virtually eliminating the need for the costly diluent additives required in conventional upgrading processes.
"We have shown that we can reduce viscosity by up to one hundred percent, reduce concentrations of sulfur by forty percent and reduce heavy metals by seventy percent or more. The process improves the oil by as much as 5 to 10 points on the American Petroleum Institute (API) scale, yielding a more valuable product that can also be handled and transported at a significant savings. Furthermore, the separated asphaltines can be sold to asphalt producers.
"The ROI for these systems is expected to be significant," Agolli added. "As you can imagine, our customers are as excited as we are about the potential to achieve major savings in the handling and transport of heavy oil while at the same time increasing revenue from sales of higher quality product."
Petrosonic intends to generate revenue from owning and operating upgrading facilities based on its Sonoprocess(TM) technology, as well as through sales of systems, licensing of the technology and participation in joint venture and/or other profit participation partnerships.
According to Agolli, the Sonoprocess(TM) solution features a dramatically smaller footprint and can be delivered at a far lower capital cost per barrel of capacity as compared to conventional upgrading technologies that have proven not to be cost effective for smaller and medium size producers.
"We believe that the technology will open up significant opportunities for small and medium size producers for whom upgrading was previously not an option, but large producers also value the flexibility and scalability provided by our technology," Agolli explained.
Heavy oil and bitumen are terms used interchangeably to describe oil that is much thicker (higher viscosity) than medium or light oils and is solid or near-solid at room temperature. Heavy oil typically contains significant amounts of asphalt and other impurities including heavy metals.
Because of these qualities, heavy oil is more expensive to recover, handle and transport than lighter grade crude. While it costs more to produce, its value in the marketplace is reduced in comparison to lighter grade crude oils, because it is also requires more refinery processing to produce high quality light distillates.
According to a recent report by Chevron entitled "Heavy Oil, Unlocking the Potential," heavy oil comprises 50 percent of known oil reserves (roughly 8 trillion barrels) but represents just one in ten barrels of current production. New global investment could double this output by 2025.
The Energy and Information Administration (EIA) forecasts future heavy oil production to increase by 200 percent from 2006 to 2030. Of the world's total oil reserves, an estimated 53 percent are in the form of heavy oil or bitumen.
Capital spending for heavy oil related infrastructure has continued to grow consistent with the dramatic gains in heavy oil production. As we continue to see this capital spending, the Company believes that Petrosonic Sonoprocess(TM) system has the opportunity to become one of the major de-asphalting and upgrading processes for heavy oil producers, pipeline and rail transporters and terminal owners.
About Petrosonic Energy, Inc.
Petrosonic Energy, Inc. was established to deliver innovative technologies to the energy sector. Our current primary focus is to provide technologies that upgrade heavy oil economically and in an environmental friendly manner. Our patented Sonoprocess(TM) uses clean tech sonic energy to de-asphalt heavy oil at much smaller scale and lower capital costs than conventional Upgraders and without use of water or release of emissions in the atmosphere.
This news release contains "forward-looking statements" which are not purely historical and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of new business opportunities. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.
Petrosonic Investor Contact:
Petrosonic Energy, Inc.