by Steve St. Angelo, SRSRocco Report:

As the U.S. and global oil industry continue to cannibalize itself just to stay alive, the market is totally clueless because investors are being misled by the fallacy that technology will solve our peak oil crisis. While technology has allowed more oil to make it to the market, it has done so at a very high cost. Unfortunately, a significant percentage of the increased cost to produce this high-tech oil was subsidized by debt from unsuspecting investors.

Hundreds of billions of Dollars were invested in the U.S. Shale Energy Industry by investors who were looking for a higher return on their money than they could receive from banks or other financial institutions. Sadly, most investors will not see the return of their funds as the U.S. Shale Energy Industry isn’t making the profits to pay back this debt.

However, many resource analysts aren’t able to understand the ramifications of the falling EROI – Energy Returned On Investment and Thermodynamics in the energy industry. Thus, they believe in the fantasy of unlimited oil production and economic growth on a finite planet. Analysts and the public believe this nonsense due in part to claims of new revolutionary energy extraction technology. Once such company is Petroteq Energy that claims that it can produce oil sands at a low-cost of $20 a barrel.

Over the past several months, I have received countless emails from followers who provided links to articles promoting these amazing new energy technologies:

Clean Oil That Only Costs $20
Why The Next Oil Boom Will Be Fueled By Blockchain
This Revolutionary Technology Could Deliver $22 Oil… In A $70 World
Interestingly, all of these articles were promoting the same company… Petroteq Energy.

According to the company’s website:

Petroteq Energy is focused on value creation through the development and implementation of proprietary technologies for the environmentally safe extraction of heavy oils from oil sands, oil shale deposits, and shallow oil deposits.

Petroteq by way of its wholly owned subsidiary has a breakthrough, environmentally-friendly, proprietary oil sands extraction technology which is suitable for all hydrocarbon deposits. The closed-loop technology may also be applied for remedial project such as tailings ponds. After the launch of its first extraction plant in Utah, the Company now intends on scaling up its capacity with several additional, higher capacity extraction units within the state, which has over 30 billion barrels of undeveloped but recoverable oil.

In a nutshell, Petroteq supposedly has new cutting-edge, revolutionary technology that can process Utah oil shale-oil sands at a low price of $20 a barrel. And with the 30 billion barrels of undeveloped resources in the state, the company could open up a new plentiful source of oil for the United States for the next 100+ years.

Because I received so many emails about this energy company, I decided to take a closer look at it. At first, I was a bit skeptical about the company’s assertion that it could produce heavy oil at $20 a barrel. However, the more research I did on Petroteq and its competitors, the more I was convinced that the company’s claims were too good to be true due to old fashion EROI economics as well as several RED FLAGS.

How so? Well, let’s first start off with first Red Flag that takes place in many small-cap companies. And by that, I am referring to the oldest trick in the book… changing the name of the company. Petroteq Energy was previously called MCW Energy Group. On May 4th, 2017 the company announced the name change:

MCW Energy Group Announces Consolidation, Name Change, and Trading Symbol Change
TORONTO, ONTARIO — (Marketwired) — 05/04/17 —

MCW Energy Group Limited (“MCW” or the “Corporation”) (TSX VENTURE:MCW) (OTCQX:MCWEF), is pleased to report that the Corporation is proceeding with the initiatives that were approved by its shareholders at the Shareholder’s Meeting held on April 6, 2017. Accordingly, MCW will be filing Articles of Amendment to change the Corporation’s name to Petroteq Energy Inc., to change its TSXV trading symbol to “PQE”, and to consolidate each of its issued and outstanding common shares on the basis of thirty (30) common shares for each one (1) common share resulting in 7,961,574 issued and outstanding common shares.

Not only did the company change its name, but it also executed a 30 to 1 Reserve-Split. By doing a reverse split, Petroteq’s share price increased significantly. Again, this should be a RED FLAG for any investor. Now, if we also consider the miserable performance of Petroteq’s stock price, we can spot another RED FLAG:

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