Quadrise Plc, 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.
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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."