Q: What is the lifetime of the wearing components in the press unit?
A: The screw has an approximate life of 90 to 100 tonnes (30,000 litres of oil), but this can vary depending on the sample and cleanliness of rape being crushed. This equates to a cost of around 1 pence per litre of oil produced.
Q: How much oil will 1 tonne of rapeseed produce?
A: Approximately 30 to 35% of the rapeseed will be extracted as oil giving around 300 to 350 litres per tonne. The remaining cake pills will have an oil content of approximately 12 %.
Q: What uses are there for the rape oil?
A: The oil can be used for cooking or may be used in oil burners for house, w/shop, drier etc. Converted diesel engines can run on 100% oil, or the oil can be esterified to produce bio-diesel suitable for diesel engines.
Q: What uses are there for the rape cake pills? (Pellets that are about 6mm diameter and 10 to 40mm in length.)
A: The pills can either be used as part of an animal feed ration, or they can be used as fuel in heating boilers.
Q: How much energy will be used to produce 1 litre of oil?
A: 1 litre of oil will consume about 125 watts, costing about 1 pence of electricity to produce.
Q: What size of oil press would be suitable?
A: The BT press is designed to run continuously. For example a Type 50 unit will produce 240 litres of oil in a 24-hour period. (1,200 litres over 5 day week) Up to two extra press units can be added to the Cleaner unit at a later stage (see Price List for details), allowing oil production to increase as demand increases.
Non-GAAP Financial Measures
Included in this press release are references to the terms “adjusted funds flow”, “adjusted funds flow per share, basic and diluted”, “adjusted funds flow per boe”, “operating income”, “operating netback per boe” and “operating income profit margin”. Management believes these measures are helpful supplementary measures of financial and operating performance and provide users with similar, but potentially not comparable, information that is commonly used by other oil and natural gas companies. These terms do not have any standardized meaning prescribed by GAAP and should not be considered an alternative to, or more meaningful than, “funds flow”, “profit (loss) before taxes”, “profit (loss) and comprehensive income (loss)” or assets and liabilities as determined in accordance with GAAP as a measure of the Company’s performance and financial position.
InPlay remains steadfast on managing the current crisis, daily monitoring of our rapidly changing environment and prudently reacting to changing circumstances. Management will continue to take action with the objective of diligently managing costs, preserving liquidity and will make capital spending decisions considering commodity prices and liquidity levels.
We thank our employees and all of our service providers for their commitments and efforts in this unprecedented time as well as our directors for their ongoing commitment and dedication. Finally, we thank all of our shareholders and lending partners for their continued interest and support.
The Company’s operations are well positioned to make adjustments when facing these extreme volatile commodity price environments. The Company looked at all wells in detail taking into account fixed and variable costs, safety concerns, as well as shut-in and startup costs to determine which wells could be temporarily shut in or curtailed and fully restarted with minimal incremental costs. Further initiatives were also undertaken to reduce costs and scale back discretionary expenditures which allowed the Company to achieve lower operating and G&A costs during the quarter of $4.1 and InPlay has been extremely successful in obtaining approved applications under the Alberta government’s Site Rehabilitation Program (“SRP”). The Company’s diligence in submitting these applications quickly as well as our detailed grant requests has resulted in greater than $1.0 million being received from the program to date. InPlay was allocated a significantly higher portion of the total amount of this program in comparison to our percentage of Alberta oil and gas production. The Company also expects to receive additional grants in subsequent phases of the SRP. As these programs are completed, these amounts will be reflected as a reduction in our decommissioning obligation liability. We thank our operations team and key service providers in their diligence and attentiveness to this program which resulted in well received applications and significant benefit from the program..8 million ($14.18 per boe and $2.73 per boe) respectively compared to $6.7 and $1.8 million ($14.32 per boe and $3.81 per boe) in the second quarter of 2019. This is a significant achievement given the presence of fixed costs being incurred over a significantly lower production base. Improved commodity prices began to materialize in June and allowed us to start bringing on curtailed production easily meeting our sales nominations while continuing to fill inventory storage levels. As of June 30, 2020 approximately 24,000 barrels of oil were in storage allowing the Company to sell this production in the future at advantageous pricing levels.
The Company is cautiously optimistic for the remainder of 2020 and expects that commodity pricing will start gaining momentum in 2021 and beyond as the lack of capital spending on oil and gas projects on a worldwide scale will lead to declining production and ultimately result in demand exceeding supply. Commodity prices have improved quicker than originally anticipated and all cost structures have decreased as a result of internal cost cutting measures and external market conditions. Success in obtaining additional long term financing with the BDC Term Facility is expected to provide us with ample liquidity to get through this difficult period and the potential to resume our development capital program prior to the end of 2020. At current commodity prices and with lower cost structures, the Company has the ability to commence a capital program on projects that are budgeted to payout in 1 to 1.5 years, based on comparable well performance. Subject to the anticipated closing of the BDC Term Facility, we are currently working on plans to resume our 2020 capital program, depending on pricing, in the fourth quarter of 2020. The Company expects to provide capital guidance for the remainder of 2020 in the near future.
As a result of crude oil demand improving from the lows seen in April, combined with the reductions in production from OPEC+ and production curtailments by producers, commodity prices have improved earlier than initially expected. Since the end of the second quarter the Company has begun the process of bringing back on our operated shut-in and curtailed production as well as starting to service wells that have been down as long as they have payouts of approximately six months. We anticipate production returning to close to our production capacity levels in late August with average September production forecasted to approximate pre-COVID production rates, including oil inventory of approximately 28,000 to 30,000 barrels which will opportunistically be sold into the spot market prior to year-end.
The forward-looking information and statements contained in this news release speak only as of the date hereof and InPlay does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.