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How will you be handling financing for the project? It's pure project financing. We would form a special purpose project company that we would call a special purpose vehicle. MMEX would be an owner of that, and then we would bring in their equity. We'll bring in some of own equity, and we'll bring in outside equity, and we'll bring in outside debt. So the project, though, is really dedicated to the payment of the debt and the servicing of the equity. It would be a pure project finance vehicle.
No stock sale? We will run some money in the market as part of our equity that we put in. That's the reason why we wanted to use MMEX. It's a microcapped company that we've had for a long time that we've had no assets in it. We wanted to use it as a vehicle to get everything moving. We'll raise money at MMEX, and we'll invest money into the project.
Will you be seeking any tax abatement or incentives? We are working primarily through the Fort Stockton Economic Development Council, and they’ve already offered tax abatements and other issues to work through. We haven’t gotten into the details, but they already put on the table that it’s up for discussion and negotiation. But I will tell you this, the tax issues don’t either make or break the project.
Who is handling the environmental assessment for the project? We’ve got several consultants that we’re talking to on a number of fronts. But what they asked me not to do is give out their name because they’ll get a billion calls. We’ve got a well-known Houston firm that’s doing the engineering and design work. We’ve got a well-known Dallas firm that’s putting together the business plan, the modeling and all of the marketing and input sides. They’re sort of the gold standard to do this. That’ll all constitute the financing documents that we go with. We have yet to settle on an environmental consulting firm, but we’ll do that and go to the Texas Commission on Environmental Quality.
By virtue of picking something around 50,000 barrels per day, we’ve become a minor source of emissions. That way we get to stay within the state of Texas. The EPA has delegated that responsibility to the Texas Commission on Environmental Quality. That’s where the air permits will be decided. We had our preliminary meeting with the TCEQ, and that’s what they want you to do. They want you to come and tell them what you’re doing before you start doing it, so they can help guide the process. They’re very pro-business, and they want to see this work.
Obviously, we need an in-state, Texas-based consultancy that’s familiar with air issues in the state of Texas, and then we’ll started putting all of that together. They have an expedited procedure if you pay $10,000 more for your filing fee, which in the scheme of things is not significant if you’re looking at a big project like this, and they’ll try to expedite the process. But realistically, its going to be a nine- to 12-month process because there are two 30-day notice periods in there for public comments.
Raven Petroleum plans to build a "green" refinery in South Texas using a geothermal plant to provide power, water and carbon sequestration. What can we expect from the Pecos refinery? It’s too early right now. We’ve built power plants in Peru and pipelines and things like that, but my gut feeling is to keep as simple as you can. We’re going to be state-of-the-art on emission standards and controls. The more pieces that you add to this, it gets complicated. We don’t have any other bells and whistles that we think are really needed. We use very little water in this process. There is water available, and we’re in the 100-gallons-per-minute range, but we will have a closed-water system. We clean and loop it, so that’s not a lot of water for an industrial facility.
We already met with the water board, and they told us that they have ranchers out there that use 2,000 to 3,000 gallons per minute and that your normal garden hose is 5 gallons per minute. So 100 gallons per minute, in perspective, it’s not very big of a deal. That’s great because water is a special resource in West Texas as it is everywhere.
We’ve got two major power lines that come right through the property. That’s another significant factor for us. Power is readily available. Obviously, construction permits have to go through the county. We’ve met with the county judge. We’ve met with the mayor. We’ve met with the water board. We did all that before we ever made the announcement.
What is MMEX’s relationship with Maple Resources?
I started my company called Maple Resources Corp. I own 100 percent of the shares in the privately held company. I started in Dallas in 1987. We used Maple Resources as a vehicle, and we acquired a bunch of producing properties in the United States. We did a bunch of transactions in the $20 million-to-$40 million range buying production. Our biggest transaction was that we bought the Cabot Corp.'s gathering and processing systems in the Panhandle, West Texas, New Mexico and Oklahoma. We operated that for several years, and then I packaged all the U.S. assets up and I sold them in 1992 and we went to Peru.
I took Maple and a few of the management people, and that's how we got concessions in Peru for the natural gas fields, an existing refinery and some legacy oil fields that were connected to the refinery. We've been operating in Peru ever since.
I own 100 percent of Maple Resources USA, and that's my vehicle to go and find opportunities. Maple Resources is also negotiating a two-terminal facility at a refinery in Brazil in the state of Bahia, which is north of the Strait of Rio. It's near a city called Salvador. The largest petrochemical complex in the Southern Hemisphere is located about 30 kilometers from this. So, we're negotiating over that, but all of that is being done in the name of Maples Resources USA.
When I started looking at the refinery opportunities in West Texas, Maple Resources did all of that. But then, once we got the land, some of the assets and intellectual property rights, we just bended that into MMEX. Because I'm a majority shareholder of MMEX, I wanted to rehabilitate MMEX. It's had a history of a mining business, but we had to sell off assets, and so the stock is worth very little. But we've got several ventures including ourselves. We've basically invested more than $20 million in MMEX since 2010.
Will Maple Resources ever go public? No. I think that the advantage is that Maple can always be a privately held company. It can go put 100 deals together that can be public, but there's an advantage to having a privately held company. Being a public company is not easy. It's expensive. You've got public auditors and filings, and it's a lot of work. But the trade-off is that you've got access to capital markets that you don't otherwise have as a private company. My thoughts are to keep Maple Resources private.
Any chance of MMEX’s stock getting upgraded? We've been over-the-counter bulletin board, and we slipped down to over-the-counter pink sheets. We're at the bottom of the barrel. There are listing standards for Nasdaq or the other exchanges, but you have to have so much share flow, and your share price has to be $1 dollar or more. We would like to upgrade as soon as we can. That would be one of the great plans that we'd like to follow.
What does MMEX stand for? When we bought MMEX, it was called Management Energy, but the symbol has always been MMEX. So, we changed it to have MMEX in the name and kept it simple. When we were in the mining [business] in Colombia with MMEX, we had a lot of environmental problems with the mines that we were trying to develop. So we basically shut it down. It went fallow for a number of years, but then I came back over the last year and a half to resurrect it. We have several investors, including myself, that put a lot of money in it. Half of our investors are in Peru. I just felt that if we could put some good assets into MMEX, get out of the mining business altogether and focus on what we know like oil and gas, refining pipelines and power, then it would make a lot of sense. We changed the name about a year ago to MMEX Resources. We've always kept it simple. The plan was to put more resources into MMEX, more than just a refinery.
