Unveils Strategic Plans to Capitalize on Emerging Opportunities in California's Evolving Oil Market
WOODS CROSS, Utah, Dec. 19, 2024 (GLOBE NEWSWIRE) -- Sky Quarry Inc. (NASDAQ: SKYQ) ("Sky Quarry" or "Company"), an integrated energy solutions company committed to revolutionizing the waste asphalt shingle recycling industry, released a letter to shareholders from Sky Quarry management. The letter provides insights into the Company's performance, key achievements of 2024, and its strategic focus as it navigates recent market developments.
Dear Shareholders,
2024 has been transformative for Sky Quarry, with significant achievements shaping the future of our Company. Since our founding in 2019, our mission to transform waste asphalt shingles into valuable, sustainable resources has been the driving force behind everything we do.
Before we dive into our recap and key highlights for the year, we want to address a significant development in California's oil and refinery market, one we believe could positively impact Sky Quarry in 2025 and contribute to our future growth.
Recent proposed legislative changes affecting California's oil refineries, including the planned closure of Phillips 66's 140,000 bbl/day Los Angeles refinery, are expected to drive a significant shift in regional fuel supply, indicating a tight market and potential shortages of product. Since California provides over 150,000 barrels a day of fuel to Nevada, Sky Quarry sees a significant market opportunity and believes that by capitalizing on it, we can solidify our position as a key player in the Western fuel market.
As the sole crude oil refinery operator in Nevada, our strategically located facility is poised to provide the market additional refining capacity. Free from the stringent restrictions faced by California-based refineries, our production is expected to increase in 2025 and amid the anticipated reduction in supply within the Nevada market, we believe we are well-positioned to capture market share and achieve higher refining margins driven by regional scarcity.
2024 Initiatives Accomplished
In 2024, we made meaningful progress which underscores the strength of our vision and mission, highlighted by our NASDAQ listing on October 10th. Our entry into the public markets serves multiple purposes, including the ability to raise capital for expansion and growth, enhance our visibility across the industries of Energy, Waste Technologies, and Renewables, and to attract a broader base of investors who share our vision for a sustainable future.
Additionally, we successfully completed a public offering, raising $6.7M through the sale of 1,118,005 shares of Common Stock and welcomed over 3,800 new investors to our existing base of 7,000+. This positioned the Company for its NASDAQ debut. This latest offering, combined with our $18M+ crowdfunding campaign in 2022, ranking in the top 1% of crowdfunding raises ever, combined with our successful warrant exercise in July 2024, brings the total raised to over $29.5M to date.
The year 2024 also marks the successful completion of our 2024 capital expenditure (CapEx) program for PR Spring, our flagship hydrocarbon extraction facility. As a critical component for our waste-to-energy initiatives, this facility will connect our upstream and downstream operations, supplying sustainably produced heavy crude oil to our Foreland Refinery, which we anticipate will significantly enhance production capacity.
To date, we have invested a total of $7 million to prepare the facility and have committed over $1.3 million in improvements this year. The majority of this effort has been dedicated to procuring critical equipment and working closely with engineering partners to advance the facility's retrofit preparations.
In anticipation of the completion of PR Spring and expected influx of sustainably produced oil it will bring; we made key strategic improvements to our Foreland Refinery in Nevada to optimize its production capacity. This involved an overhaul of the primary and secondary boilers, and the completion of 24 work packages. Additionally, we received the permit grants for the right-of-way on public lands covering 40 acres, with an operational term extending through December 31, 2055. These upgrades will significantly improve our production capacity, which we expect to produce up to one million barrels of sustainable oil annually.
Looking Ahead to 2025
We believe 2025 will be a milestone year of major growth for Sky Quarry and as we prepare for the coming year, we remain steadfast in our commitment to building this Company into a leader in the waste asphalt shingle recycling sector.
Market Performance
We believe it's important to address concerns regarding our market performance and share price. Management is actively working to bring awareness to the investing community through a variety of strategic investor relations efforts, both domestically and in the European market, with a goal of building a vibrant public investor base and expanding our approximate 10,000 shareholders. The Company is also beginning discussions to broaden the shareholder base to include additional institutional investors that share our long-term vision to help the US economy transition to sustainable fuel consumption and sustainable feedstock for the asphalt roofing shingle industry.
Production and Sales Growth
Looking ahead, we expect strong growth as our refinery asset improvements increase production, and our direct consumer sales and marketing efforts continue to perform. With the heavy oil produced at PR Spring set to be refined at our refinery we anticipate even greater production levels with increasing revenues and cash flow in the coming year.
Modular ASR Facility
We are on track to deploy our first modular ASR facility, bringing us closer to our goal of operating five facilities within the next five years. These modular facilities will form the upstream component of Sky Quarry's operations, providing feedstock to our PR Spring facility in Utah.
Engineered for scalability and cost efficiency, these units are expected to provide a steady supply of waste asphalt shingles while producing sellable byproducts, such as sand and granules, for local and regional markets, expanding our market reach and strengthening our value proposition.
Market Opportunities
As mentioned above, we plan to capitalize on emerging market opportunities such as the planned closure of the Phillips 66 refinery in late 2025. Responsible for 8% of California's gasoline supply, this closure is expected to create a significant shift in the growing regional fuel demand. As a result of this closure, Nevada and Arizona will likely need to seek alternative sources for a significant portion of their fuel needs.
According to the US Energy Information Administration, the Foreland refinery is one of just 10 new refineries built in the United States since 1990 and while it is a small facility its location makes it an important refinery for the western half of the US.
A Heartfelt Thanks to Our Shareholders
The Sky Quarry team is more energized than ever about the possibilities and potential of Sky Quarry. We truly believe that our mission can make a significant impact on the future of sustainability, and that the world needs a company like ours. We sincerely thank our shareholders for their unwavering support and belief in our vision. Your confidence has empowered us to achieve meaningful milestones this year and we are excited to continue delivering value as we work together to build a more sustainable future.
From all of us at Sky Quarry, we wish you a joyous holiday season and a prosperous New Year.
Respectfully,
David Sealock, CEO
About Sky Quarry Inc.
Sky Quarry Inc. (NASDAQ: SKYQ) and its subsidiaries are, collectively, an oil production, refining, and a development-stage environmental remediation company formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soils. Our waste-to-energy mission is to repurpose and upcycle millions of tons of asphalt shingle waste, diverting them from landfills. By doing so, we can contribute to improved waste management, promote resource efficiency, conserve natural resources, and reduce environmental impact. For more information, please visit skyquarry.com.
Forward-Looking Statements
This shareholder communication may include ''forward-looking statements.'' All statements pertaining to our future financial and/or operating results, future events, or future developments may constitute forward-looking statements. The statements may be identified by words such as "expect,” "look forward to,” "anticipate,” "intend,” "plan,” "believe,” "seek,” "estimate,” "will,” "project,” or words of similar meaning. Such statements are based on the current expectations and certain assumptions of our management, of which many are beyond our control. These are subject to a number of risks, uncertainties, and factors, including but not limited to those described in our disclosures. Should one or more of these risks or uncertainties materialize or should underlying expectations not occur or assumptions prove incorrect, actual results, performance, or our achievements may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. We neither intend, nor assume any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. You are urged to carefully review and consider any cautionary statements and the Company's other disclosures, including the statements made under the heading "Risk Factors" and elsewhere in the Company's Form 1-A offering statement filed with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained.
Investor Relations
Chris Tyson
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MZ Group - MZ North America
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