MCW's strategic plan is to integrate a steadily-growing, but low profit margin fuel distribution enterprise with an emerging, proven oil sands extraction technology company. The Company's vision is to become one of North America's leading vertically-integrated oil and gas companies creating shareholder/customer value through their innovations in oil sands production and fuel distribution.
Despite gradual market growth and MCW's innovative approach to the fuel products distribution industry in western United States, the Company is well aware that profit margins and further growth is contingent upon the growth of the overall economy, nationally and internationally. A strategic move into the oil sands sector signifies an opportunity to dramatically increase profit margins in an industry where there is little competition and yet there is added pressure within the United States to develop new sources of domestic energy. Costs of mining oil sands are extremely attractive with costs ranging from $30.00 to $40.00 USD per barrel, depending on the richness of the oil sands materials.
There has been very little development to date within the U.S. oil sands resource areas, mainly due to a lack of an acceptable extraction technology. MCW believes that its proven, proprietary and environmentally-friendly technology is the key to unlocking the safe development of the oil sands in America, especially from a domestic source. The Company has implemented a lease-specific environmental study and has applied for permitting in order to establish a development site on their 50+ million barrel oil sands lease in Utah.
To mark the beginning of MCW's diversification into the oil sands development industry, the Company entered into a binding Letter of Understanding in June, 2011 for funding of $3,000,000 USD (See Press Release dated May 27th, 2011) in the form of a convertible debt financing. The funding was completed early, two months prior to the September, 2011 closing date. These funds will be utilized for MCW's first oil extraction unit which will be deployed on its oil sands lease in Asphalt Ridge, Utah. The remainder of the funds will be used for site development, mine feasibility studies and an environmental impact study to be completed by the Company's geological and environmental consultant teams.
At this point in time, there is an unprecedented opportunity for MCW's diversification strategy to play a major role in the development of United States' massive oil sands resources, which total over 32 billion barrels of oil in the state of Utah alone. As a crude oil supplier to the major integrated petroleum companies, MCW will attain added strength for its pricing structures and its supply network, which will not only provide pricing advantages, but will also provide additional flexibility to its core fuel products distribution business.