Calgary, Alberta, Canada. – August 14, 2008 – Genoil Inc. (TSX.V: GNO; OTCBB: GNOLF.OB) is pleased to announce that it has signed a revised Letter Of Intent (“LOI”) with Haiyitong, Inc. (“HYT”) for our hydroconversion upgrading project in China. This revision reflects the positive attitude of both parties in working cooperatively to complete this project and the importance of this project to both companies.
The new LOI reflects more favorable re-negotiated terms for this deal, especially with respect to the financing. At present, the cost for the Genoil Hydroconversion Upgrader system to be built in HYT’s refinery is estimated at a total of $170 million. Genoil’s initial contribution has been reduced by 50% to $65 million. The balance is expected to be raised jointly by the parties using the assets of the project as collateral for a loan from local financial institutions. Also, the LOI states that Genoil will receive 65% of the project’s net profits until reaching a total of $200 million, at which time it will start receiving 10% of all net profits for as long as the unit remains in operation. Genoil believes that these new LOI terms will help enhance the marketability of the financing for the project.
Representatives of HYT and the local government from where the site is located met with Genoil’s management to discuss the next steps for this project. This discussion included the set up of a joint venture company between the parties and the financing of the project.
Genoil believes a definitive agreement will be signed after the Company secures its share of project financing. HYT has already obtained its share of financing. The anticipated timeframe to complete the construction of the entire project would be two years for a complete GHU unit that will handle 20,000 barrels per day of refinery residues and heavy oil. Genoil believes that operating costs per barrel for the GHU unit in China will be approximately $3.00 per barrel, with capital costs being under $9,000 per barrel processed.
Meetings in the Middle East
A Genoil team is presently travelling back to the United Arab Emirates to continue discussions that were started in recent weeks. Genoil hopes to finalize agreements for Genoil in that area and elsewhere for both the Genoil GHU upgrader and oil water separation technologies.
Genoil has been working with new agents and professionals, such as Dr. Hashem Dezhbakhsh. Dr. Dezhbakhsh is a new member of Genoil’s advisory board with expertise in economics forecasting, financial economics and the oil industry, among others. Dr. Dezhbakhsh is a professor of economics and chair of the Economics Department at Emory University, Atlanta, and he recently flew to the Middle East on behalf of Genoil to supervise the creation of cost and profitability models for the Genoil Hydroconversion and Oily-Water Separator units. He assisted the Genoil team in the preparation of economic presentations to major oil companies and port operators, attended meetings and participated in those presentations.
Genoil Inc. is an international engineering technology development company based in Alberta, Canada that develops innovative hydrocarbon, oil and water separation, and marine technologies.
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ADVISORY: The TSX Venture Exchange has neither approved nor disapproved of the information contained herein. FORWARD LOOKING STATEMENTS: Certain information regarding Genoil, including availability of capital and other sources of funds and future plans may constitute forward-looking statements under applicable securities law. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “hope”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. Forward-looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and, in some cases, information received from or disseminated by third parties, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Forward looking statements contained in this release necessarily involve risks and uncertainties associated with an oil and gas technology development and engineering corporation. As a consequence, actual results may differ materially from those anticipated. Accordingly, readers should not place undue reliance upon forward-looking information contained herein. Although Genoil believes that the assumptions underlying such forward looking statements are reasonable given current market conditions, and information received or disseminated by third parties is reliable, it can give no assurance that such expectations will prove to have been correct. Genoil does not assume responsibility for the accuracy and completeness of the forward-looking statements and such forward-looking statements should not be taken as guarantees of future outcomes. Subject to applicable securities laws, Genoil does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. The forward-looking statements contained in this press release are expressly qualified, in their entirety, by this cautionary statement. Additionally, statements included in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Further information on potential risk factors that could affect Genoil’s financial results can be found in Genoil’s disclosure materials filed on SEDAR at www.sedar.com and with the Securities Exchange Commission available at www.sec.gov.