CALGARY, Alberta, April 22, 2020 (GLOBE NEWSWIRE) -- Questor Technology Inc. (“Questor” or the “Company”) (TSX-V: QST) provides several announcements in response to the COVID-19 pandemic and current market conditions. These include COVID-19 risk mitigation, changes to activity outlook and updated strategic priorities.
COVID-19
The safety of Questor's employees, customers, vendors, their families and the communities that we work in, is our number one priority. Questor has implemented several measures to protect both our field and office employees while ensuring business continuity during this difficult time.
Questor has reduced staffing levels at all locations to essential personnel only and has implemented remote work procedures for the majority of office staff as part of its business continuity plan.
We have banned non-essential travel and have implemented standards for interacting with clients, third-party contractors and visitors to minimize risk of exposure.
ACTIVITY OUTLOOK
COVID-19, combined with the oil price war, have affected our customers and will therefore have a significant effect on our 2020 business results. It is difficult to predict how long these market conditions will continue to affect activity levels. Demand for Questor’s equipment and services is constantly changing. Questor’s largest customer in North Dakota has served notice that it intends to return all equipment under rent over the month of April, stating that at the current oil prices they are required to reduce or shut-in production. In Colorado, customers who have already reduced capital expenditure plans have now started to suspend drilling programs.
STRATEGIC PRIORITIES
Questor's strong financial position has been accomplished through managing costs and maintaining capital discipline while providing best in class equipment and services to our customers. Our focus has not changed and remains consistent despite this downturn. We will continue to provide exceptional service to our customers while efficiently managing our costs. This disciplined strategy is focused on preserving positive operating cash flow in order to maintain our strong balance sheet during these uncertain times.
The realities of a significant decline in demand for our equipment and services has been challenging. We intend to retain the operational experience throughout our company. One key outcome of our strategies is to be strongly positioned coming out of this downturn.
During this time, we will be focusing on gaining market share, educating our customers around our solutions for combating emissions, diversifying out of oil and gas and expanding our waste heat to power offering into other industries and applications. To support this effort a corporate rebranding is underway. We will continue to build our digital capability focused on an emissions platform that will eventually enable us to credibly quantify emission reductions for our clients and guarantee a zero emissions site, with the end goal of monetizing the emission reduction offsets. Questor believes that the clean technology industry will remain an integral component of resource development over the medium to long term and that the Company will be well positioned given its focus on top-tier service, quality, logistics management and technology to meet our client’s emission commitments in the future. The resilient companies that survive these challenging times will continue to focus in the medium to long term on addressing the commitments they have made to their investors and the public, which includes reducing greenhouse gas emissions. Questor’s proven, cost effective technology solutions will play an instrumental role in enabling these companies to meet their goals and targets. As these companies ramp up and return to normal activity levels, Questor will be ready.
The following key cost and discretionary spending plan adjustments will be implemented during the month of April:
- Companywide reduction of personnel costs; the measures consist of reduced work week, layoffs, furloughs and salary reductions;
- Reduction in discretionary costs in all categories;
- Closure of the Florida ClearPower Systems facility;
- Reduction of capital expenditures;
- Suspension of all non-essential travel; and,
- Modified work schedules to provide increased flexibility to respond to fluctuating demand for the Company's services, while reducing personnel costs.
The Company expects these fixed cost reduction measures will reduce year over year fixed costs by approximately 20%. While these cost reductions are significant, the Company will continue to look at all aspects of its business for further business optimization opportunities in these uncertain times. The Federal Government of Canada announced a new wage subsidy program recently and we will assess how this and other available programs can be utilized to reduce the impact of this downturn on our staffing levels going forward.
Regarding the above announcements, Questor’s CEO, Audrey Mascarenhas stated: “Questor extends our thoughts to those affected by the COVID-19 pandemic. We will do our part to minimize the spread of this very dangerous virus. Our top priority is the safety of our people, our client’s personnel and the communities where we work. We have taken measures to make sure that their health is not compromised while we continue to provide best in class emissions control equipment and service to our valued customers.”
“Financially, the progress we have achieved over the last three years leaves Questor well positioned to navigate this challenging environment. Our balance sheet demonstrates the financial strength of the Company and we will continue to ensure that our liquidity needs are not compromised. With future industry activity levels uncertain, the strategic priorities announced today will continue to ensure Questor’s financial flexibility. We will manage the business accordingly and will continue to operate at the highest efficiency to further protect the interests of all our stakeholders.”
On April 17, 2020, the federal government announced it will invest $1.7 billion to clean up abandoned and inactive natural gas and oil wells in Alberta, Saskatchewan, and British Columbia. In addition, the federal government will also establish a $750 million Emission Reduction Fund, with a focus on methane, to create and maintain jobs through pollution reduction efforts. The $750 million emissions reduction fund relief package is framed as jumpstarting efforts to cut methane emissions, including those enacted under the Federal Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds which came into effect on April 26, 2018, and Alberta’s Methane Emission Reduction Regulation, which came into force on January 1, 2020. These regulations respectively set targets for reducing methane emissions by approximately 20 mega tonnes by 2030, and by 45% relative to 2014 levels by 2025.
The Company is pleased that the federal government is committed to reducing methane emissions in a substantive way. This goes a long way toward indicating the federal government does understand the importance of this industry and the struggles it’s currently facing. Questor is currently evaluating its opportunities to offer its products and services to support the initiatives and is excited to potentially play a role to show case its abilities.
ABOUT QUESTOR TECHNOLOGY INC.
Headquartered in Calgary, Alberta, Questor has a trained workforce who provide specialized waste gas incineration products and services that may be required for the exploration, development and production of oil and gas reserves.
There are a number of methods for handling waste gases at upstream oil and gas facilities, the most common being combustion. Flaring and incineration are two methods of combustion accepted by the majority of provincial and state regulators. Historically, the most common type of combustion has been flaring. Flaring is the igniting of natural gas at the end of a flare stack—a long metal tube up which the gas is sent. This causes the characteristic flame associated with flaring.
A correctly operated incinerator can yield higher efficiencies through proper mixing, gas composition, retention time, and combustion temperature. Combustion efficiency, generally expressed as a percentage, is essentially the amount of methane converted to CO2, or H2S converted to SO2. The more converted, the better the efficiency.
Questor designs, manufactures and services proprietary high efficiency waste gas incineration systems. The Company’s incineration product line is based on clean combustion technology that was developed by the Company and patented in both Canada and the United States in 1999. Questor has continued to evolve the technology over the years making a number of improvements from the original patent. The Company currently has five new patent filings that are currently pending.
Questor’s highly specialized technical team works with the client to understand the waste gas volume and composition. The Company’s technical team determines the specific incineration product specification to achieve 99.99 percent combustion efficiency. The incinerators vary in size to accommodate small to large amounts of gas handling, the range is 50 mcf/d to 5,000 mcf/d. The incinerators also range in automation and instrumentation depending on the client’s requirements. Questor’s incinerators are used in multiple segments of the Oil and Gas industry including: drilling, completions, production and downstream.
The Company has three primary revenue streams; incinerator sales, incinerator rentals and incinerator services. Incinerator services include incinerator hauling, commissioning, repairs, maintenance and decommissioning. The Company offers incinerator products for purchase or for rent. Questor’s current key incineration markets are Colorado, North Dakota, Mexico, Pennsylvania, Texas and North East BC. The United States Environmental Protection Agency (EPA) issued regulations to reduce harmful air pollution arising out of crude oil and natural gas industry activities with a particular focus on the efficient destruction of volatile organic compounds (VOC’s) and hazardous air pollutants (HAP’s) and has recently introduced methane emission reduction legislation. In conjunction with U.S. Environmental Protection Agency (EPA) regulations, Colorado’s Regulation 7 mandates the use of enclosed combustion (incinerators) and now targets methane, resulting in a statewide focus on the responsible management of potentially fugitive hydrocarbons. North Dakota also has additional requirements that reflect some of the unique and specific needs that extend beyond the EPA’s requirements. Over 90% of the Company’s incinerator rental fleet is located in Colorado and North Dakota where regulation supports demand for its proprietary high efficiency waste gas incineration systems.
The Company services it’s key markets with field offices in Brighton and Fort Lupton, Colorado; Watford City, North Dakota and Grande Prairie, Alberta. The infrastructure at the field offices consist of field technicians, maintenance technicians and administration. The facilities generally include, office space, maintenance shop and a yard to store incinerators. Questor personnel based out of the Company’s head office in Calgary, Alberta include Officers of the Corporation, management, engineering, technical sales, accounting and administration.
Questor trades on the TSX Venture Exchange under the symbol ‘QST’.
| Audrey Mascarenhas | Dan Zivkusic |
| President and Chief Executive Officer | Chief Financial Officer |
| Phone: (403) 571-1530 | Phone: (403) 539-4371 |
| Facsimile: (403) 571-1539 | Facsimile: (403) 571-1539 |
| Email: amascarenhas@questortech.com | Email: dzivkusic@questortech.com |
Certain information in this news release constitutes forward-looking statements. When used in this news release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "seek", "propose", "estimate", "expect", and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect the Company’s current views with respect to future events based on certain material factors and assumptions and are subject to certain risks and uncertainties, including without limitation, changes in market, competition, governmental or regulatory developments, general economic conditions and other factors set out in the Company’s public disclosure documents. Many factors could cause the Company’s actual results, performance or achievements to vary from those described in this news release, including without limitation those listed above. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this news release and such forward-looking statements included in, or incorporated by reference in this news release, should not be unduly relied upon. Such statements speak only as of the date of this news release. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
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