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NEW YORK, 02/03/2005 -- Genoil (TSXV:GNO; OTCBB: GNOLF.OB) is pleased to announce that a series of transactions have been completed which have resulted in the elimination of CDN$3 million of debt held by a single secured lender. The lender exercised its 10 million warrants held in Genoil. The proceeds from the exercise of these 10 million warrants (CDN$2.3 million) were paid to the lender in order to pay off Genoil's secured debt.
Genoil will show a one-time gain of approximately CDN$670,000 on the transaction. Genoil concurrently arranged for the sale of the common shares acquired by the lender to a group of primarily U.S. and European investors. This transaction has significantly enhanced Genoil's balance sheet by eliminating all secured debt.
On a pro-forma basis, this transaction had the following impact on Genoil's September 30, 2004 balance sheet:
Assets: No change
Secured Debt: Eliminated
Total Liabilities: 57% decrease
Shareholders' Equity: 200% increase
Working Capital Deficiency: 58% decrease (improvement)
Basic shares outstanding: 10 million increase
Warrants outstanding: 10 million decrease
Fully diluted shares outstanding: No change
The elimination of all secured debt, in addition to the recent injection of CDN$5.6 million dollars from a multibillion dollar U.S. based investment fund has placed Genoil in a strong financial position. "With all the debt off our balance sheet, Genoil can fully devote capital to supporting our sales force currently operating in dozens of countries, and continue the development of our proprietary oil and gas conversion solutions," said David Lifschultz, Chairman and CEO of Genoil. "With 80 million barrels of oil consumed around the world every day, oil companies and refiners are constantly searching for more efficient methods to upgrade their heavy products in order to meet market demands and maximize profitability. Genoil's Hydroconversion Upgrader (GHU) is an extremely attractive tool to meet these goals since it offers an economical entry to hydroconversion, even at a small scale. We see a strong demand with an increased sales push in 2005."
Operational Update
Genoil is continuing pilot testing for Lukoil and expects these tests to continue all through February. Genoil has begun placing orders for long delivery time equipment for its GHU installation at the Silver Eagle Refinery in Utah. Detailed engineering of this project will continue over the next several months, with construction anticipated to begin later in the third quarter of this year.
About Genoil
Genoil (TSXV:GNO; OTCBB: GNOLF.OB) is an international technology development company providing solutions to the oil and gas industries through the use of proprietary technologies, which represent significant breakthroughs in commercial applications. The company's flagship product, the Genoil Hydroconversion Upgrader (GHU), combines hydrogen with carbon in order to convert bitumen, heavy oil and refinery residue into light, sweet synthetic oil with higher yields of transportation fuels. The GHU also eliminates a majority of contaminants such as sulphur and nitrogen from the feed, and can either be easily integrated into existing refinery infrastructures or be built as a stand alone unit. Genoil believes that by upgrading the 13 million bbls/d of refinery residuals into lighter distillates, that the dependency of the world on Middle Eastern light oil can be decreased. The company is headquartered in Alberta, Canada with offices in New York, Mexico, Columbia, Ecuador, Peru, Russia, Saudi Arabia, and Bahrain, with coverage in numerous other countries. To learn more about Genoil, visit www.genoil.net.
Statements included in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand, and the company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues in the sponsoring client. Further information on potential risk factors that could affect the company's financial results can be found in the company's Reports filed with the Securities and Exchange Commission.
ADVISORY: The TSX Venture Exchange has neither approved nor disapproved of the information contained herein. Certain information regarding the company, including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources; as a consequence, actual results may differ materially from those anticipated. The company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contemplated by the forward-looking statements.
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