REG - Quadrise PLC - Valkor License Revenues

QuadriseAnnouncement

15/01/2025 07:00

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RNS Number : 3444T  Quadrise PLC  15 January 2025

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.

 

 

15 January 2025

 

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

 

Valkor License Revenues

 

Quadrise Plc (AIM: QED), the transition technology provider for a cleaner
planet, is pleased to announce the signature of an addendum to the Site
License and Supply Agreement ("SLS Agreement") with Valkor Technologies
LLC ("Valkor") in Utah, USA and to confirm, pursuant to the SLS Agreement
(as amended) the Company's first license revenues.

 

Following the excellent progress made by Valkor during 2024 at their Primary
Project Site ('PPS') at Asphalt Ridge, Utah, USA, Valkor has confirmed to the
Company that it has now secured the minimum project finance required to
develop the PPS of at least US$15 million.

 

With Valkor now having confirmed the required PPS development project
financing, and reflecting the fact that PPS production volumes of heavy sweet
oil are now expected to be phased, Quadrise and Valkor have agreed an addendum
to the 2023 SLS Agreement as follows:

 

·    A phased payment of the initial license fee, with US$0.35 million now
payable by Valkor on 31 January 2025 and the remaining US$0.65 million due on
1 December 2025.

 

·    The supply by Quadrise of a smaller Multifuel Manufacturing Unit
("MMU") of 600 bpd capacity on an interim basis during 2025, for which Valkor
will pay US$0.2 million on 1 December 2025, with a further US$0.3 million due
to Quadrise upon supply of a full size 6,000 bpd MMU to the PPS in exchange
for the 600 bpd MMU by return.

 

·    US$75,000 is payable quarterly by Valkor from 1 April 2025 onwards,
in exchange for Quadrise providing engineering and process design and
commissioning services, site operations, compliance support and project
development support services for a minimum period of two years.

 

Other than the amendments set out above, the other terms of the SLS Agreement
remain unchanged, with Quadrise granting Valkor the exclusive right and
license to use the Company's technology at the PPS to produce MSAR® and
bioMSAR™ and to market fuel produced from the PPS on a non-exclusive basis
in Utah.

Commenting on the update, Jason Miles, Chief Executive Officer of Quadrise,
said:

 

"We are delighted that Valkor has secured the necessary project finance for
the first heavy sweet oil project, following successful Utah state approvals
and subsequent subsurface oil drilling during 2024.

 

The continued operation and production from the oil wells by Valkor and
partners will assist the next phase of customer acquisition and sales. We are
thrilled with the confidence shown by Valkor in investing in our technology at
an early stage. Supply of the smaller MMU to Valkor for their 2025 demand is
ideal for both parties, providing Valkor with a 600bpd emulsion system to
produce client volumes for trials, and Quadrise with additional commercial
production flexibility during the year.

 

The award of our first technology license in Utah is another pivotal moment
for the company and complements Valkor's low carbon enhanced oil recovery and
production methods planned there. When combined, our respective technologies
will provide very attractive low sulphur fuels and biofuels with compelling
economics and environmental credentials starting in 2025."

 

Steven Byle, Chief Executive Officer of Valkor, added:

 

"After years of effort, we are very pleased about recent progress in Utah's
Uinta Basin. We have received additional drilling approval from the state of
Utah, we are expanding our drilling program, and we are engineering our first
mined oil sands plant after successfully securing project finance.

 

During 2025 we are planning to increase oil production through the drilling of
additional wells and bringing our first mined oil sands plant online. The
resulting increase in oil production will allow us to move on to the next
stage of enhancing our oil product quality and securing new offtake
agreements.

 

Securing the Quadrise technology license for Utah is important to demonstrate
higher value markets are available for heavy sweet oils when blended to
Quadrise emulsion fuels and biofuels. We look forward to working with the
Quadrise team to market these fuels and implement their technology in the
USA."

 

About the Valkor Project

 

The use of low-carbon extraction and production methods by Valkor in Utah for
the project sponsors is expected to result in heavy sweet oil with a very low
well-to-tank carbon intensity. MSAR® produced using this oil is calculated to
have a 15-20% lower well-to-wake (or well-to-stack) carbon intensity than
conventional very low sulphur fuel oil (VLSFO). The production of bioMSAR™
using renewable glycerine or other biofuel feedstocks would then further
reduce fuel carbon intensity. The project is well located to supply local
industrial and powerplant consumers, and marine consumers in the west and gulf
coasts of the USA via rail, in line with the Company's shipping
decarbonisation strategy.  It is estimated that some 77 billion barrels of
recoverable oil are located at the Uinta Basin in Utah.

 

For additional information, please contact:

 

 Quadrise Plc                                             +44 (0)20 7031 7321
 Andy Morrison, Chairman

Jason Miles, Chief Executive Officer

 Nominated Adviser
 Cavendish Capital Markets Limited                        +44 (0)20 7220 0500
 Ben Jeynes

Katy Birkin

George Lawson

 Joint Brokers
 Shore Capital Stockbrokers Limited                       +44 (0)20 7408 4090

Toby Gibbs, Harry Davies-Ball (Corporate Advisory)

Fiona Conroy (Corporate Broking)

VSA Capital Limited
+44 (0)20 3005 5000

Andrew Raca (Corporate Finance)

Andrew Monk (Corporate Broking)

 Public & Investor Relations
 Cutbill Jacoby

Andy Cutbill
+44 (0)7841 576000

Frankie Dundon
+44 (0)7312 274086

 

About Quadrise Plc

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

Learn more at: www.quadrise.com
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