Meridian Energy updates on Davis Refinery
Meridian Energy Group, Inc. released updates on the latest progress on the Davis Refinery and beyond.
Davis Refinery - a 49,500 bpd full-conversion crude refinery being built in the heart of North Dakota's Bakken Shale Play.
The refinery will be:
- First full-conversion US refinery in 40 years
- First full conversion refinery ever permitted as Synthetic Minor Source
- Cleanest refinery on the planet (emissions 10%-15% of industry averages)
- First full conversion refinery built by a development stage firm
- The first digital refinery; and,
- A prototype for series of industry changing facilities.
McDermott International selected as design-construction contractor
to build Davis under a firm fixed-price performance guaranteed contract,
which will be finalized once McDermott has completed preliminary
engineering.
- There is plentiful light low-sulfur Bakken crude available at substantial discounts from WTI supply/delivery contracts in negotiation.
- Meridian negotiating definitive agreements on product offtake and logistics -will be completed well before the close of financing.
- Project financing will close after FEED in 2Q-2019 Davis commercial operations - 2 years later.
Davis Permits, Litigation:
The Davis Refinery is fully permitted; site preparation and grading began
in July of 2018, and construction will resume Spring/Summer 2019.
Meridian is facing each legal challenge and winning through expertise,
Professional approach, and strong community support (from jobs, income levels, local tax base).
Permian Project in West Texas, Other Projects:
- Davis gave rise to valuable intellectual property on how to design/permit small, Capital efficient and clean full conversion refineries; will amplify shareholder value by building additional refineries in other shale basins.
- On February 8th, 2019 Meridian entered into an agreement for site control for Walton Station, a 58,000 bpd refinery in the Permian Basin (Texas) and began site studies, designs and permitting work. Site can accommodate up to three additional units.
Financing, Profitability:
- Morgan Stanley & CIBC are co advisors & placement agents for $1.1bn Davis financing. Funds from $60mm Preferred Offering cover costs up to the Davis financial closing, Permian & Beyond development costs.
- Davis and Walton Station will give Meridian 107,000 bpd in ops in 3-4 years Estimated EBITDA of $500mm/yr & asset value of $4bn.
- Meridian shares will be worth considerably more than the current price of $10/share, and investors could earn up to 40% IRR on the first two projects, alone.
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