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Questerre’s oil shale assets include its project in the Kingdom of Jordan (“Jordan”) and its investment in Red Leaf Resources Inc. (“Red Leaf”). Red Leaf is a private Utah based company whose principal assets include the EcoShale process to produce oil and shale and oil shale leases in the state of Utah. Questerre currently owns approximately 40% of the common share capital of Red Leaf.
Red Leaf’s primary focus has been to validate the business case for the project as well as the preliminary engineering design and cost estimates. The Company recently entered into a collaboration agreement with the Ute Tribe, a Federally recognized Indian Tribe to jointly develop this project. The agreement includes the potential supply of utilities to the project, raw crude and marketing of finished products.
Red Leaf has also been advancing its patented technology that was redesigned to incorporate carbon capture into the process. The company anticipates it will benefit from the tax incentives under the recently introduced US Inflation Reduction Act for carbon capture. During the year, Hatch, a global engineering firm, validated the new design and identified a path to commercial development.
Red Leaf completed a pre-FEED engineering study on the processing facility to validate the design and capital costs. A preliminary estimate of the capital costs to incorporate carbon capture into the facility design was also completed. The company also began the design for a potential project in Jordan in conjunction with local companies. The project is designed to demonstrate its technology at scale on a continuous basis.
The Company plans to utilize the Red Leaf technology for its project in the Kingdom of Jordan. Given the ongoing redesign of the technology, limited third party engineering was conducted on its acreage in the Kingdom in 2022. In conjunction with Red Leaf, the Company is assessing the potential for a small scale commercial project in Jordan with local partners that could provide both engineering and fabrication services as well as offtake for the produced crude oil.
The Company acquired the Jordanian project in 2015 through a Memorandum of Understanding (“MOU”) for the appraisal and development of oil shale with the Ministry of Energy and Mineral Resources in Jordan (the “MEMR”). The MOU covered an area of over 380 km2 in the Isfir-Jafr area, approximately 200 km south of the capital Amman. The Company holds a 100% working interest in the MOU and the resources. In 2017, the Company high graded its acreage and reduced the area under the MOU to 265 km2.
Consistent with the prior year, negotiations with the Government of Jordan for the fiscal and other terms of the concession agreement for the project remain ongoing. Questerre continues to hold the exclusive exploration rights to the project during the term of these negotiations.
