TOP IDEAS: Questor Technology Inc. (TSXV: QST) sales could soar with new air quality requirements for oil and gas operations.
Questor Technology Inc. (TSXV: QST - $0.37) has not finished Q4 just yet but, according to the outlook in Company's most recent Management Discussion and Analysis (MD &A) filing, revenues will be at their peak this quarter for 2012. When released, Q4 results will be good news for investors.
Questor Technology has already reported earnings of $742,264 or $0.03 per share for the first nine months of 2012.
The company manufactures high-efficiency waste gas incinerators for sale or for use on a rental basis. The marketplace recognizes the Company's proprietary clean air incinerator technology, which destroys noxious or toxic hydrocarbon gases as best-in-class, no more so than from the oil and gas industry. The Company's impressive list of customers includes: ExxonMobil, Trans Canada, Schlumberger, EnCana and Nexen.
The Company attributes its robust sales outlook to new regulations enacted by the Environmental Protection Agency (EPA) in the United States this fall to reduce harmful air pollution from oil and gas fields. In the second half of 2012, Questor reported that the majority of new incinerator sales orders and requests for proposals (RFPs) received; emanate from the United States due to high levels of shale exploration and development operations which need to address the new air quality requirements.
To capitalize on this immediate market opportunity, Questor says it is in the process of increasing its own sales and marketing efforts to facilitate expansion of the Company's presence in the United States. Questor Technology has a very strong balance sheet: free of debt and sufficient cash resources to fund this growth opportunity.
In certain European countries, regulation requiring incineration has been enacted, too, amidst increased public controversy and growing concerns of ground water contamination and air quality impacts of oil and gas field development. To accommodate the perceived future demand for its rental incinerators, the Company is adding new equipment to its European equipment fleet in 2013.
For a clean-tech small cap company that will have produced profits for three years running, the robust Q4 sales outlook may be an early indication that 2013 will be the watershed year for the Company's clean air incinerator technology. Given the trend of new regulatory compliance and environmental protection forces, our conclusion is that Questor's profits and stock valuation shall continue to accelerate.
Questor Technology has approximately 24.8 million shares outstanding.
Questor Technology website www.questortech.com
Author Disclosure: TSXV: QST- Long
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