Genoil Inc.
TSX VENTURE : GNO
OTC Bulletin Board : GNOLF

Genoil Inc.

November 17, 2008 06:00 ET

Genoil Inc. Provides Update on HYT Project Status

CALGARY, ALBERTA--(Marketwire - Nov. 17, 2008) - Genoil Inc. (TSX VENTURE:GNO) (OTCBB:GNOLF) is providing an update on ongoing marketing and financing efforts on Genoil's heavy oil and refinery residue upgrading project with Haiyitong Inc. ("HYT") in China.

Genoil continues to work towards the development and financing of its heavy oil and refinery residue upgrading project with HYT. Genoil had previously press released that based on its internal analysis this project should provide a significant operating profit to the joint venture once the plant is operating. This rate of return has actually increased despite the lower oil price because the joint venture pays for its heavy crude and residue based on market price, but the sale price of products is fixed. These sale prices have not been reduced by Chinese authorities. There is no guarantee that sale prices will remain at this level, but at this time the project is more profitable than when crude prices were higher.

Genoil has recently revised its internal economic model for the entire project to respond to questions that have arisen around the current status of the project. Using current oil crude prices, the internal return on investment (IRR) of this project has improved significantly. Current estimations show the project IRR went to 63%, from 27%. Albeit counterintuitive, the slide in the crude prices has made a very positive impact on our economic model. Genoil recognizes that the volatility in the world oil market and the trends in supply and consumption can change the current conditions, but believes the IRR of the project will remain robust even if prices went back to previous levels.

Genoil's Chief Executive Officer, Mr. David Lifschultz, confirms that Genoil is continuing in its efforts to obtain project financing for US$65 million. In these difficult financing times Mr. Lifschultz states: "This is an on-going process, and we are optimistic that we will be able to secure financing for the project."

Genoil and HYT have agreed to build a 20,000 bpd Genoil Hydroconversion Upgrader (GHU®) unit at the refinery site. The purpose of this $170MM project is to enable the refinery to use lower cost feedstock. Instead of buying light, sweet crude to refine, HYT will be able to process a mixture of cheaper heavy sour crude oil and the existing refinery residues. These residues are currently sold as a low value by-product. It is expected that this process will result in significant cost savings to HYT and provide a revenue stream to Genoil. This plant will also demonstrate the viability of the Genoil's GHU to several major oil companies.

The Genoil proprietary upgrading technology is now being marketed to five national oil companies in different countries, and significant quantities of heavy crude are being discussed with each of them while Genoil's proposals are undergoing extensive due diligence reviews. At the same time, Genoil is working with a sovereign development bank to line up significant funding for these projects.

Genoil also continues with sales efforts for its oily water separation technologies. In addition to significant cost reductions applied to the Crystal and Crystalline brands and mentioned in our last press release, other important cost reductions have been recently achieved. Genoil believes the markets in Asia and other parts of the world are opening up to Genoil's separation equipment based on the new recently lowered prices and superior quality. Additionally, new sales agents are being recruited and being engaged in aggressive sales effort in many new regions.

Genoil is an international engineering technology development company based in Alberta, Canada that develops innovative hydrocarbon, oil and water separation, and marine technologies.

FORWARD LOOKING STATEMENTS: Certain information regarding Genoil, including availability of capital and other sources of funds and future plans may constitute forward-looking statements under applicable securities law. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "hope", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe" and similar expressions. Forward-looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and, in some cases, information received from or disseminated by third parties, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Forward looking statements contained in this release necessarily involve risks and uncertainties associated with an oil and gas technology development and engineering corporation. As a consequence, actual results may differ materially from those anticipated. Accordingly, readers should not place undue reliance upon forward-looking information contained herein. Although Genoil believes that the assumptions underlying such forward looking statements are reasonable given current market conditions, and information received or disseminated by third parties is reliable, it can give no assurance that such expectations will prove to have been correct. Genoil does not assume responsibility for the accuracy and completeness of the forward-looking statements and such forward-looking statements should not be taken as guarantees of future outcomes. Subject to applicable securities laws, Genoil does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. The forward-looking statements contained in this press release are expressly qualified, in their entirety, by this cautionary statement. Additionally, statements included in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Further information on potential risk factors that could affect Genoil's financial results can be found in Genoil's disclosure materials filed on SEDAR at www.sedar.com and with the Securities Exchange Commission available at www.sec.gov.

ADVISORY: The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • Genoil Inc.
    David Lifschultz
    Chairman and CEO
    (914) 834-7794
    Website: www.genoil.net