NXT Energy Solutions Inc.
Q1 2021 Earnings Call Transcript
Published:
- Operator:
- Good day, ladies and gentlemen. My name is Leah, and I will be your conferencing operator today. At this time, I would like to welcome everyone to the NXT Energy Solutions 2021 First Quarter End Operating and Financial Results Conference Call. All participants will be in listening-only mode for the first part of the conference call. I would now like to turn the meeting over to Mr. George Liszicasz, President and CEO of NXT Energy Solutions. Please go ahead, Mr. Liszicasz.
- George Liszicasz:
- Thank you, Leah, and welcome, and thank you, everyone, for joining us today for NXT Energy Solutions first quarter 2021 financial and operating results conference call. This is George Liszicasz and joining me today’s conference call is Eugene Woychyshyn, Vice President of Finance and Chief Financial Officer; Dr. Xiang Gui of R&D – Head of – Director of R&D, Research and Development of SFD sensors; Rashid Tippu, Director of Geoscientists for Africa, Asia and Middle East; Enrique Hung, Director of Geosciences for the Americas; and Mohammad Saqib, Head of Interpretation and Project Engineering. Please be advised that Mr. Saqib, as we did correctly refer to as the Director of Operations previously, he has never been a director, and his position has always been Head of Interpretation, Project Engineering and no changes to his role or responsibility has occurred.
- Eugene Woychyshyn:
- Thank you, George, and welcome, everyone. As George mentioned, our first quarter 2021 financial statements and management discussion and analysis were filed on SEDAR’s website yesterday and will shortly be available on EDGAR. From a financial perspective, the focus remained on supporting the execution of the business development effort and continuing to control and optimize costs. For the first quarter, our financial results were as follows
- George Liszicasz:
- Thank you, Eugene. First, I want to convey my sincere for that everyone is well and continues to stay healthy at this time. As the world increases its vaccination levels and economies reopen, we continue to see strong evidence that robust economic activity is expected to continue. The International Energy Agency announced today that the 2020 oil supply glut created by the global pandemic has cleared even as demand suffers a blow from the resurgence of the virus in India. Global consumption is on track for a rebound of 5.4 million barrels a day or 6% this year after 2020 is unprecedented slot. The International Energy Agency forecasting, the recovery will gather momentum in the second half, causing stockpiles to treat dwindle even further. The WTI is currently sitting around $66 per barrel, which is good sign for the business of oil and gas exploration. Although no survey revenues were recorded in Q1, SFD survey opportunities continue to progress in our core areas of focus in Africa, Mexico and South America. In addition, with the recently announced acquisition of the SFD geothermal technology rights, the company now embarks on an exciting new chapter in transitioning itself as a multiple application solution provider for both the oil and gas and geothermal exploration industry. The main subsurface properties, such as porosity, permeability and impermeable cap rock that are vital in the search for oil and gas resources, are equally critical for locating the most prospective geothermal resources. For these reasons, the SFD technology has a natural extension to geothermal applications. Since first commercialized in 2007 for hydrocarbon use, NXT is not an intrusive SFD airborne technology enables its customers to significantly improve real success rates while reducing the overall negative environmental impact of traditional large-scale brand service by minimizing disruptions to community life and surface use. In April 2020, NXT received confirmation of a patent granted from the European Patent Office bringing the total number of countries granting the patent internationally to 44. NXT will apply for patent protection for the geothermal application of SFD once development of the SFD sensors reach appropriate milestones. As industries worldwide transition toward low-carbon economy, geothermal energy has gained greater prominence for its environmental benefits as a non-intermittent renewable energy source. NXT looks forward to leveraging this extensive research and marketing skill set acquired in hydrocarbon resource development and commercialization and applied to geothermal research application worldwide.
- Operator:
- Your first question comes from the line of Mike Mork. Your line is open.
- Mike Mork:
- Hi, George and guys. Just wonder if you could give a little more definitive answer on testing and the time frame of testing the SFD for the geothermal potential geothermal surveys?
- George Liszicasz:
- Thank you, Mike, for your question. As we mentioned in this call – on this call before, NXT needs to finalize the necessary modifications to the sensors. We are working on that. Right now, and we are going to undertake a more robust work very soon. Once it is completed, then we will do calibration flights, as we mentioned, in various to where the geothermal applications are going to be set in the geology because you can have different geological settings, as you know, and we have to calibrate the sensors for that. And then once it is done, then we are going to develop the project pipeline and start engaging the clients that have expressed interest in geothermal application already worldwide.
- Mike Mork:
- Okay, thank you.
- Operator:
- Your next question comes from the line of Jan Waso. Your line is open.
- Unidentified Analyst:
- Good afternoon, team. I’m just checking are you guys looking in the future to also find the oil and also drill it ourselves, so we can also get the profits from the sale of the oil, not just the flying over and detecting it? Thank you.
- George Liszicasz:
- Thank you very much. Yes. Our plan is strategically – I don’t know somebody has – telephone open. But I will just continue. So our plan is basically to partly in cost – no feedback. It’s very but we are looking at some of the contracts would contain participation rights, also access to royalties, so that we can even our revenue stream, but the line is very bad. So I don’t know what’s going on. I don’t know if you can hear us well. But the answer is, yes.
- Unidentified Analyst:
- Thank you.
- George Liszicasz:
- Thank you very much.
- Operator:
- And your next question comes from the line of Charles Davidson. Your line is open.
- Unidentified Analyst:
- Good afternoon, George. How are you all today?
- George Liszicasz:
- Hi, Charles. How are you?
- Unidentified Analyst:
- Fine, thank you. A quick question about cash. Considering the cash that the company went through in the first quarter and the remaining cash, there is, of course, the possibility that a contract won’t come through in the next quarter. Perhaps you could touch on what the company’s plans are?
- George Liszicasz:
- Thanks, Charles. So we are confident in our ability to execute on our commercial plan. And the operating cash that will be generated from it. So – we’re confident in our commercial plans.
- Unidentified Analyst:
- Okay. So basically, you’re not worried about it at all.
- George Liszicasz:
- That is Correct.
- Unidentified Analyst:
- Thank you.
- George Liszicasz:
- Thank you.
- Operator:
- And our next question comes from the line of Dike Miller. Your line is open.
- Unidentified Analyst:
- Hello, and thank you for the conference call. I’m just curious like we don’t – didn’t generate any revenue this round, are we anticipating through some of these contracts coming up that by year-end, we will have generated some revenue.
- George Liszicasz:
- Our short answer is we are confident that we will be able to generate revenue.
- Unidentified Analyst:
- A significant amount or enough to cover the cost?
- George Liszicasz:
- That is to be determined, but we are – we’ve got several items in our pipeline And we are working on converting those into revenue.
- Unidentified Analyst:
- Okay, thank you.
- Operator:
- And we have a follow-up question from the line of Jan Waso. Your line is open. Mr. Jan Suazo, your line is open. Mr. Jan Waso, your line is open. You may ask your question.
- Unidentified Analyst:
- Can you hear me?
- George Liszicasz:
- Yes, we can. Yes, we can.
- Unidentified Analyst:
- I don’t have a follow-up question. Something happened there. Thank you.
- George Liszicasz:
- Thank you, everyone, then attending to our conference call, and I wish to update you shortly.
- Operator:
- And this concludes today’s conference call. Thank you for participating. You may now disconnect.