$MCWEF News recap, MCW Provides Disclosure Update
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Posted On: 01/13/2017 8:58:47 AM
$MCWEF News recap, MCW Provides Disclosure Update
http://finance.yahoo.com/news/mcw-provides-di...00164.html
TORONTO, ONTARIO--(Marketwired - Dec 23, 2016) - MCW Energy Group Limited (the "Company"
(TSX VENTURE:MCW) (MCWEF), a Canadian holding company involved in the development of environmentally-friendly oil sands technologies, the production of oil from Utah's vast oil sands deposits, and remediation projects involving extraction of contaminating hydrocarbons, provides the following update to prior disclosure as the result of a review by staff of the Ontario Securities Commission.
At its Temple Mountain site in Utah, the Company's property contains an estimated 139,539,000 gross barrels of bitumen as disclosed in an independent resource evaluation report dated (the "2015 Report" January 16, 2015 prepared by Chapman Petroleum Engineering Ltd. ("Chapman" in accordance with the Canadian Oil and Gas Evaluation Handbook (COGEH). Of these bitumen in place volumes, it has been estimated that 87,817,000 barrels would be in favorable circumstances for a commercial mining operation, as stated in a previous Chapman report dated July 29, 2014, which was prepared for internal purposes. This previous report included an evaluation assuming the bitumen would be strip-mined and sold as a product for road construction and did not consider crude oil extraction from the sand. For that reason it was concluded that the project, under that scenario, was not covered under NI 51-101. It is our understanding that the government royalty on future production of these resources would be in the range of 15%, which would result in a net value of 76,644,000 barrels.
The Company's June 7, 2016 News Release contained a quote by its Chairman inadvertently referring to the "87 million barrel oil reserve", when it should have read "87 million barrel oil resource." Pursuant to the July 2015 amendments to NI 51-101 and current COGEH criteria, the 87,817,000 barrels of bitumen would be classified as a "Contingent Resource".
The contingencies with the Company's resource are that the technology in use is of the experimental nature, i.e. it has not been used at full capacity for an extended period of time and the commerciality of the overall project heavily relies on the stability of oil prices.
The Company's May 18, 2016 and July 26, 2016 News Releases disclosed that the Company was producing oil using a mobile extraction plant of Vivakor Inc. ("Vivakor" and that Vivakor Inc. was acting as operators of the Company's Maeser, Utah facilities. Despite not being a proven technology, Vivakor has created a tar sand extraction system process that operates totally green, totally enclosed and creates three beneficial use products. The system would fall under EPA guidelines as a secondary manufacturing facility. Once processed the tar sands have been up to one hundred percent recycled. The light ends are utilized in the hydrocarbon extraction process as a condensate, light to medium hydrocarbon streams are utilized as a waste oil to supply energy to the thermal process, the heavy carbon chain materials recirculate through the liquid flow chart of the machine and upgrade the oil as the process takes place and finally the solids leaving the unit can be used as an asphalt product.
The corporate presentation of the Company dated in Q3 2016 stated statewide petroleum resource estimates in Utah that are not part of the Company's petroleum lease.
The impairment accounting policy disclosed in paragraph 3(h) of the Company's interim financial statements for the period ended May 31, 2016 and in the Company's annual financial statements for the year ended August 31, 2015, notes that management is required to make assumptions and estimates about recoverable reserves, when it should have said "resource". The Company will change the terminology used in the audited consolidated financial statements for the year ended August 31, 2016 and in all subsequent periods from "reserves" to "resource" to more accurately represent the nature of its bitumen resource. The Company has and intends to in the future, use the independently calculated total resource and calculated production to both record the amortization of the carrying value of the mineral property and its potential amortization at the end of any reporting period.
http://finance.yahoo.com/news/mcw-provides-di...00164.html
TORONTO, ONTARIO--(Marketwired - Dec 23, 2016) - MCW Energy Group Limited (the "Company"
(TSX VENTURE:MCW) (MCWEF), a Canadian holding company involved in the development of environmentally-friendly oil sands technologies, the production of oil from Utah's vast oil sands deposits, and remediation projects involving extraction of contaminating hydrocarbons, provides the following update to prior disclosure as the result of a review by staff of the Ontario Securities Commission. At its Temple Mountain site in Utah, the Company's property contains an estimated 139,539,000 gross barrels of bitumen as disclosed in an independent resource evaluation report dated (the "2015 Report"
January 16, 2015 prepared by Chapman Petroleum Engineering Ltd. ("Chapman" in accordance with the Canadian Oil and Gas Evaluation Handbook (COGEH). Of these bitumen in place volumes, it has been estimated that 87,817,000 barrels would be in favorable circumstances for a commercial mining operation, as stated in a previous Chapman report dated July 29, 2014, which was prepared for internal purposes. This previous report included an evaluation assuming the bitumen would be strip-mined and sold as a product for road construction and did not consider crude oil extraction from the sand. For that reason it was concluded that the project, under that scenario, was not covered under NI 51-101. It is our understanding that the government royalty on future production of these resources would be in the range of 15%, which would result in a net value of 76,644,000 barrels. The Company's June 7, 2016 News Release contained a quote by its Chairman inadvertently referring to the "87 million barrel oil reserve", when it should have read "87 million barrel oil resource." Pursuant to the July 2015 amendments to NI 51-101 and current COGEH criteria, the 87,817,000 barrels of bitumen would be classified as a "Contingent Resource".
The contingencies with the Company's resource are that the technology in use is of the experimental nature, i.e. it has not been used at full capacity for an extended period of time and the commerciality of the overall project heavily relies on the stability of oil prices.
The Company's May 18, 2016 and July 26, 2016 News Releases disclosed that the Company was producing oil using a mobile extraction plant of Vivakor Inc. ("Vivakor"
and that Vivakor Inc. was acting as operators of the Company's Maeser, Utah facilities. Despite not being a proven technology, Vivakor has created a tar sand extraction system process that operates totally green, totally enclosed and creates three beneficial use products. The system would fall under EPA guidelines as a secondary manufacturing facility. Once processed the tar sands have been up to one hundred percent recycled. The light ends are utilized in the hydrocarbon extraction process as a condensate, light to medium hydrocarbon streams are utilized as a waste oil to supply energy to the thermal process, the heavy carbon chain materials recirculate through the liquid flow chart of the machine and upgrade the oil as the process takes place and finally the solids leaving the unit can be used as an asphalt product. The corporate presentation of the Company dated in Q3 2016 stated statewide petroleum resource estimates in Utah that are not part of the Company's petroleum lease.
The impairment accounting policy disclosed in paragraph 3(h) of the Company's interim financial statements for the period ended May 31, 2016 and in the Company's annual financial statements for the year ended August 31, 2015, notes that management is required to make assumptions and estimates about recoverable reserves, when it should have said "resource". The Company will change the terminology used in the audited consolidated financial statements for the year ended August 31, 2016 and in all subsequent periods from "reserves" to "resource" to more accurately represent the nature of its bitumen resource. The Company has and intends to in the future, use the independently calculated total resource and calculated production to both record the amortization of the carrying value of the mineral property and its potential amortization at the end of any reporting period.
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