What happened with SKYQ today?
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Sky Quarry’s revenue comes entirely from Eagle Springs Refinery, operated through its subsidiary Foreland. It processes heavy crude into products sold under contracts and on the spot market. Paving asphalt, diesel and vacuum gas oil account for most sales; vacuum gas oil is an intermediate product that other refineries turn into finished petroleum products. Customers include those refineries and wholesale, bulk and retail buyers, primarily in Nevada, Utah and California.
The refinery relies on crude trucked in largely from regional producers. Its output is constrained by regional feedstock availability and air-permit limits. A small group of suppliers provides key inputs without firm long-term supply contracts, while three customers account for most sales and have no ongoing obligation to buy.
Sky Quarry is also developing PR Spring, which does not yet generate revenue. It plans to use its proprietary ECOSolv solvent process to separate oil from waste asphalt shingles, send the recovered heavy oil to Eagle Springs, and sell recovered paving and manufacturing materials. The proposed model also includes charging waste-disposal fees for accepting shingles. Starting this business requires funding to finish the facility retrofit, and ECOSolv has not yet been used commercially.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Sky Quarry Inc.’s results hinge on how much crude its Eagle Springs refinery processes, regional crude availability and diesel and asphalt prices, while its planned shingle-recycling business needs funding and successful commissioning.
EIA Crude Oil Stocks Change (Oct/16)
Sky Quarry’s weekly US crude and fuel stock levels show how tight oil supply may be, which can move crude feedstock costs and the diesel and other product prices Foreland Refinery earns.
Expected-0.3MLast release-8.557M
If it comes in above expectations
If the reading is above the -0.3M estimate, it is above the previous -8.557M. If stocks are higher than expected, looser supply may lower crude costs for Foreland, but lower diesel and other product prices could offset that benefit if selling prices fall before its costs do.
If it comes in below expectations
If stocks are lower than expected, tighter supply may raise Foreland’s crude costs, and if it cannot raise diesel and other product prices as quickly, the delay may squeeze its gross profit.
