ETX Systems

Press Release

Date: September 20, 2007

Review panel releases report on royalties, with implications for heavy oil upgrading in Alberta

CALGARY, AB – The Royalty Review Panel released its awaited report on royalties this week. The document, entitled "Our Fair Share" was issued on September 18th, 2007. The Alberta government has committed to responding to the document within the next month.

In the document, it is recommended that royalties on most of Alberta's hydrocarbon resources be increased. If adopted the recommendations will make the economics more challenging for future projects planned for the oil sands. A significant increase in royalties on oil sands production, as recommended by this report, will make it more difficult to sanction new projects. Should this proposal be put into law the case for technology as a lever to improve economics becomes more compelling. ETX Upgrading is one such technology that stands to receive more attention, with its potential to enable field upgrading and increase returns associated with oil sands production. Of material interest to all upgrading projects is the 5% upgrader royalty credit proposed in the report, introduced to encourage construction of additional upgrading capacity in Alberta. Under the plan, up to 5% of the capital invested in the upgrader could be used to offset royalties. These credits could be sold and transferred to third parties.

“The proposed 5% royalty credit on upgrading capital deployed in the province is, I believe, a recognition by the Review Panel of the role Upgrading must play in meeting the challenges of future oil sands development. It bolsters the case for ETX Upgrading integrated with oil sands production that we have been promoting for some time now,” said Gerard Monaghan, CEO of ETX Systems.

ETX Systems Inc. is a fit-for-purpose private entity based in Calgary, AB, whose sole mandate is to commercialize its patented IYQ Upgrading technology. The process claims to deliver revolutionary yields and qualities relative to delayed coking, for significantly less cost per barrel. The increased production of high quality liquids leads to reduced environmental impact, leveraged through both the upstream and downstream scope.  For more information contact Gerard Monaghan, CEO of ETX Systems Inc. (gerard.monaghan@etxsystems.com).

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