1.
Corporate
Profile:
Meridian
Energy
Group,
Inc.
Meridian
Energy
Group:
Project
developer,
owner
and
operator
of
clean
fuels
and
specialty
petrochemical
plants,
focused
on
producing
low
emission
fuels.
Management:
Comprised
of
senior
industry
executives
with
extensive
experience
in
designing,
building
and
operating
petrochemical
and
energy
plants
around
the
world
for
industry
leading
companies.
Primary
Businesses:
Will
build,
own
and
operate
a
crude
oil
refinery
with
a
minimum
capacity
of
20,000
bpd.
The
refinery
will
be
located
on
up
to
300
of
Meridian’s
620
acres
outside
Belfield,
North
Dakota,
in
the
heart
of
the
Bakken
oil
field.
Meridian
is
also
participating
in
a
joint
venture
that
is
developing
a
residential,
commercial
and
industrial
real
estate
project
on
an
adjacent
400
acres
in
Belfield.
Background:
The
boom
in
oil
production
in
North
Dakota
has
far
outstripped
the
refining
capacity
in
the
state.
Each
day,
1.6
million
barrels
of
crude
oil
produced
in
the
Bakken
oil
field
is
shipped
long
distance
to
refineries
on
the
Gulf
Coast,
Eastern
Seaboard
and
in
the
Pacific
Northwest,
at
great
expense,
with
transportation
surcharges
of
as
much
as
$18
per
barrel.
At
the
same
time,
millions
of
gallons
per
day
of
refined
transportation
fuels
are
imported
into
North
Dakota
from
distant
refineries
in
states
like
Texas
and
Oklahoma.
There
are
only
two
refineries
in
North
Dakota
currently,
with
a
combined
capacity
of
76,000
barrels
per
day,
less
than
5%
of
the
Bakken
crude
produced.
A
potentially
lucrative
opportunity
exists
to
refine
Bakken
crude
into
diesel
fuel
and
other
refined
products
to
meet
the
demands
of
the
local
market.
The
Refinery:
By
building
a
state
of
the
art,
highly
efficient
and
environmentally
beneficial
refinery
at
the
source
of
the
oil
production,
an
abundant
supply
of
low
cost
crude
oil
feedstock
is
readily
available.
Numerous
producers
are
anxious
to
find
a
market
for
their
refined
products
and
save
on
transportation
costs.
Where
a
high
demand
for
clean
transportation
fuels
exists,
a
substantial
profit
opportunity
exists.
A
much
larger
capacity
refinery
may
be
built
based
upon
the
individually
negotiated
“tolling”
agreements
(see
below)
entered
into
between
Meridian
and
local
crude
producers.
A
recent
Supreme
Court
decision
removed
certain
EPA
limitations
on
refineries,
making
the
construction
of
a
new
refinery
viable
for
the
first
time
since
1976.
Project
Economics:
The
refinery
will
generate
revenue
and
profits
as
a
tolling
contractor.
Under
tolling
agreements,
Meridian
will
accept
feedstock
from
a
customer
and
convert
it
to
the
products
specified
by
the
customer
for
a
locked-‐in
fee.
This
business
model
eliminates
market
risk
on
both
the
buy
and
sell
sides
as
the
refinery
charges
a
fee
for
processing
regardless
of
the
price
of
crude
oil
or
the
finished
product.
2.
Profitability:
An
independent
analysis
performed
by
the
renowned
Refinery
Economics
Department
of
the
Colorado
School
of
Mines
concluded
that
a
20,000
bpd
refinery,
built
at
the
Meridian
location
under
prevailing
conditions,
would
generate
over
$800
million
per
year
in
revenues,
an
EBITDA
of
nearly
$300
million,
and
after
tax
net
profits
of
$157
million.
That
would
translate
to
approximately
$3
to
$4
per
share
in
earnings
and
an
estimated
share
value
of
$30
to
$40.
Project
Financing:
The
estimated
total
cost
for
a
20,000
bpd
refinery
would
be
approximately
$430
million,
which
will
be
raised
from
institutional
investors,
including
Meridian's
strategic
partners
and
through
investment
banking
underwriters.
Pre-‐
construction
activities
are
being
funded
by
a
Company
Direct,
$8
million
Private
Placement
of
Common
Stock
for
$2.00
per
Share.
Project
Execution:
Meridian’s
management
team,
and
the
contractors
it
will
use,
have
substantial
expertise
in
designing,
building
and
operating
crude
oil
processing
plants.
The
design
of
the
refinery,
and
all
of
the
process
equipment
used,
will
be
highly
efficient,
environmentally
compliant,
cost
effective,
state
of
the
art,
and
commercially
proven.
There
will
be
no
technology
risk
associated
with
the
project.
Permitting:
The
refinery
will
not
need
an
EPA
nor
Army
Corps
of
Engineers
nor
US
Dept.
of
Fish
and
Game
permit.
Construction
permitting
will
be
through
the
North
Dakota
Dept.
of
Health
and
Billings
County
N.D.,
whose
officials
have
embraced
the
Company's
projects
as
a
boon
for
the
area
and
a
creator
of
hundreds
of
permanent
jobs.
Meridian
is
also
upgrading
local
utilities
and
contributing
to
the
construction
of
new
schools,
housing
and
entertainment
venues
through
its
co-‐development
of
the
Bighorn
Properties
real
estate
project
nearby.
Risk
management:
Techniques
employed
by
Meridian,
along
with
bonds
and
insurance
from
leading
underwriters,
will
assure
project
completion
in
a
timely
fashion.
The
Company
will
be
protected
against
cost
over-‐runs,
labor
migration,
commodity
supply
risks
and
other
factors
that
could
adversely
affect
the
project's
completion.
The
Offering:
4
Million
Shares
of
Common
Stock
for
$2.00
per
Share
for
a
total
of
$8,000,000,
Over-‐subscriptions
accepted
at
the
Company's
discretion
up
to
$12,000,000.
Accredited
Investors
only.
Offering
to
commence
May
1,
2015.
Taking
indications
of
interest
at
this
time.
Contact:
Frederick
M.
Bloom
Vice
President,
Business
Development
877-‐542-‐5213
2070
Business
Center
Drive,
Suite
160
Irvine,
CA
92612
