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

Genoil Inc.

May 19, 2008 06:00 ET

Genoil Inc. Provides Update

CALGARY, ALBERTA--(Marketwire - May 19, 2008) - Genoil Inc. (TSX VENTURE:GNO) (OTCBB:GNOLF) is pleased to provide an update on the progress of its oil-water separation division and its hydroconversion project with Haiyitong Inc. ("HYT"), formerly Hebei Zhongjie Petrochemical Group Company Ltd.

CRYSTAL SEA

Genoil has embarked on a very aggressive marketing campaign that emphasizes price, as the Corporation has decreased its Crystal Sea prices by 35%. Reductions in costs are being made by sourcing the manufacturing and personnel in Romania rather than in North America, which is expected to result in substantial savings and significantly lower its monthly burn rate. Genoil is also currently converting its marketing and sales methods to utilize strictly agency relationships, and has allocated responsibility for the supervision of such marketing and selling efforts to the chief engineer who invented the Crystal Sea, Paul Costinel.

It is Genoil's goal to increase Crystal Sea sales in order to aid in offsetting losses, and ultimately to achieve profitability for the Corporation.

Genoil will also be at Posidonia Exhibition 2008, one of the largest commercial marine trade shows in the world. Attendees may visit the Genoil booth #450/9 in the United States Pavilion, from June 2nd to 6th.

STATUS REPORT ON HYT PROJECT

A Genoil delegation has spent several weeks in China and has recently returned. Genoil's engineers have had meetings with representatives of the HYT refinery and the EPC contractor in order to finalize the cost estimate and the Front End Engineering and Design ("FEED") study. Following these meetings, Genoil estimates that the FEED study will be completed and presented to HYT in late May with the intent of moving to finalize a contract for the construction of a 20,000 barrels per day heavy oil upgrading facility in association with the HYT refinery. The HYT Genoil Upgrader will combine the propriety Genoil Hydroconversion Unit (GHU®) and an Integrated Gasification Combined Cycle section (IGCC), which will result in a bottomless, self-support (H2, power, steam, fuel gas, etc.) upgrading facility. Genoil is very pleased with the progress made to date and is looking forward to the construction and installation of this commercial facility.

Genoil considers the completion of the FEED study as an important step in moving forward with HYT. The importance of the FEED study relates to the detailed design of the GHU® upgrader setup specifically required for the configuration at this refinery, which enables Genoil to obtain quotes to manufacture and install the plant components. The FEED study additionally aids in calculation of the economics and ability to finance the project, allowing for better estimation of the full cost of the plant.

Subject to HYT approval of the project, Genoil intends to solicit project financing from financial institutions in China. The Corporation is planning a trip to Beijing in the near future to secure this financing. The estimated capital costs of the overall Upgrader is currently 1.26 billion RMB (US$180 million), which has been well received by HYT personnel. This represents an increase in Genoil's original estimate based on increasing equipment costs and the devaluation of the USA currency, as most of the construction costs will be denominated in Chinese currency. The Corporation's analysis currently shows that the rate of return per year on this project, if successful, should remain considerable despite the Chinese control over sales prices.

David Lifschultz, the Corporation's Chairman and Chief Executive Officer, said: "This is a very significant project for Genoil as it will mean the successful scale up of our GHU® technology. We are confident we will be able to find the needed financing in China. The appreciation of the Chinese currency means a higher US$ cost to build the plant, but it also means the profits, once converted back into US$, will be more. We believe construction of this unit will encourage the utilization of the GHU® upgrader around the world. The economics outside of China also looks good, and although you might find higher construction costs, these costs should be more than offset by the free market pricing of products in those markets."

Genoil's goal is to form a strategic partnership with China for the purpose of building merchant upgraders in that country and also abroad, based on the HYT model of rate of return on investment. It is Genoil's plan that such a strategic partnership would involve the Chinese financial authorities, and that it will enable the Chinese nation to secure heavy oil resources around the world that can be profitably upgraded using the Genoil GHU® upgrader, and thus provide the energy resources for China to grow into a great industrial nation. Rates of return are expected to vary around the world based on the quality of oil to be upgraded and the local market conditions.

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
    (212) 688-8868
    Website: www.genoil.net