MMEX Resources Corp (MMEX)

[jmjjw]

Circular logic fails to support MMEX as a valid investment opportunity.

They intend to start by building a CDU with designs from vfuels in order to get the ball rolling and generate three types of products which other refiners and fracking operations may be able to use. One who is an expert in the area and a competent person in refining can easily see they if mmex has a customer, those three products can easily be used to help generate cash flow and allow for further development of the 100,000 bbl facility.

VFuels is virtually unknown in the industry. They have no public track record of any successful delivery in the United States market.

As has been pointed out, at least twice, none of the intermediates from a crude topping unit have any use in the drilling industry, as frac fluid, or otherwise. A special use UIC permit would be required, from RCT, which would never be issued - no service company in Texas uses diesel in its slick-water frac fluid.

As has been pointed out, a stand-alone CDU cannot operate at break-even, nor can it generate positive cash-flow. This is well-understood and documented in the industry.

There are no customers in the region who need products from a facility like MMEX proposes - all of them are already real refineries, with their own crude units.

If Phase I positive cash-flow is required to get to Phase II, on the plan MMEX proposes, it will never happen.

If you read the S-1 you can easily see that this is only phase 1 of the plan. I invite you to read further and see how the plan is to eventually ship the products to the Mexican and South American markets.

Again, I've read the plan - thanks however for the tip. To "eventually" ship intermediate product to Mexico, from an inland facility like MMEX proposes, there must be an economical transportation mechanism. Ocean-going tanker transport is certainly ruled out, as MMEX's proposed facility is in the middle of the West Texas desert, an inland, land-locked location. There is no pipeline network in place from that location, and it would require connectivity to an existing pipeline network, or planning, financing, and construction of a new pipeline system to move the intermediate product by pipeline. That rules out the two most economic methods of transporting these intermediates to Mexico / Latin America.

That leaves rail, and over-the-road truck/tanker. The rail path is the next most economic approach - it is however problematic, as there is currently no rail bridge over the Rio Grand on the South Orient/Texas-Pacifico route. In addition, the 70+ miles of line is dilapidated, impassible south of Tinaja - the current track speed limit on the segment to Alpine is 10-mph, a TXDOT/USDOT limit imposed because of the severe deterioration of the road bed. While TXDOT and federal funds may eventually rehab the line, and put the bridge in place at the Presidio port of entry, that is a long way off.

All that remains is OTR truck/tanker - the least economical means of transporting crude intermediates south. A non-starter...

As many investors know, this is not for the American market as the US has plenty of solid refineries. But in the interim, I'm sure they will find a customer to help proceed to phase 2.

Finding a customer is only one part of the equation - you have to get the product to that customer economically. That is not going to happen as MMEX proposes things.