With MMEX, even if one is willing to suspend disbe

With MMEX, even if one is willing to suspend disbelief, and set aside the fact that MMEX is only an OTC share-selling scheme, there are some fundamental questions to consider.

In the best case, MMEX’s proposed Phase I rudimentary topping until could not produce a single drop of marketable product.

The current Type O AQP, issued by TCEQ, and the associated application are a matter of public record. I’ve published these documents, and references to their sources multiple times since Oct. 2017. So it is known what MMEX proposes to build, and would be permitted to operate.

Ignoring the failure to include a desalter, pre-flash, steam unit, redundant heat-exchange, critical pump-around and other missing components, the design MMEX had permitted could not produce any useful, directly marketable product.

Atmospheric Tank Bottoms (ATB), or “resid,” has no direct market. Real refineries direct ATB into vacuum processing and cracking flows, to extract valuable short-chain hydrocarbons from near useless ATB. ATB is highly viscous, and must be heated, in order to be pumped or flow in a pipeline. It must be heated during transport, making rail or OTR tanker impractical and expensive.

Atmospheric Gas-Oil (AGO), sometimes called “straight-run diesel” has no direct market. The sole potential market would be in Heavy Oil-Based Mud (HOBM), which is declining in use in the market. It is well-bore specific, and there are cheaper, safer, less environmentally impactful alternatives available - few drillers in the region use “diesel” base HOBM, and that market has shrunk to near zero. Further, distribution problems exist - ULSD are the sole diesel streams commercially distributed - anyone attempting to use MMEX’s potential AGO in this application would require a separate transport/tanker fleet, segregated storage, and racking to avoid sulphur contamination. Further, AGO requires additional processing to separate light fractions, stabilize, and deal with VOC’s in the stream. MMEX lacks all of these capabilities.

LGO, the third, and final stream (other than waste) that MMEX might produce in Phase I is more problematic. Light Gas-Oil, sometimes known as naphtha, or “straight-run gasoline” has no direct market. It contains kerosene, natural gasoline, ethane, propane, and butane, all in solution. It must be further refined, stripping the ethane, propane, and butane off, which are valuable either as feedstocks, or as marketable product, and the natural gasoline and kerosene fractions must be separated, for use as jet fuel (kerosene) or blend stock for motor fuel (gasoline). MMEX’s proposed facility lacks all of this capability.

Common to all three streams, ATB, AGO, and LGO, MMEX’s proposed facility lacks any capability for removing sulphur. This precludes the use of any of the intermediate streams MMEX might produce in combustion applications, by USEPA mandate.

So far, MMEX has published misleading, and misrepresentative statements about what Phase I can produce. Stated differently, Mad J. has outright lied.

Where does all this lead?

Ask the question:

“Why would anyone back, or fund an $88-million (or more) project that cannot produce any marketable products?”

The more sophisticated investor might also ask:

“It is known in the industry that stand-alone crude units do not operate at break-even, let alone at positive margin. Why would anyone fund a stand-alone crude unit?”

So, in summary, even suspending disbelief that a super-dilutive, insolvent OTC shell company, with no business operations, employees, or assets, atop nearly $40-million in cumulative losses and current debt, might be somehow eligible for tens to hundreds of millions in project financing - how on Earth, and why, would anyone fund a small-scale topping unit that could not produce marketable products, run at break-even, or be sustainable?