By: Tomas Ronolski - AllPennyStocks.com News

Wednesday, February 5, 2014

According to Verdantix Critical Moments, the U.S. oil and gas industry is spending an increasing amount of money on environmental remediation and pollution control and prevention. The firm’s recent analysis, which covered 87 energy companies with sales in excess of $1 billion annually, found the companies cumulatively spent $5.4 billion in 2012 in sustainability spending, with the figure expected to grow at a compound annual growth rate of 4 percent through 2017. Don’t think that big energy is just doing a good deed on their own for Mother Earth, as most of the efforts are likely the result of government agencies cracking down on pollution. Whatever the forces, the initiatives play nicely into the hands of companies like Questor Technologies Inc. (TSX-Venture:QST), a designer and manufacturer of high efficiency waste gas incinerators that it rents or sells, along with offering other combustion-related oilfield services. Questor incinerators have been tested by majors, such as Exxon/Mobil (NYSE:XOM), TransCanada Pipelines (TSX:TRP) and Royal Dutch Shell (NYSE:RDS.A) and have earned the approval of the Alberta Energy Utilities Board after showing that they provide up to 99.99-percent combustion efficiency without any particulate matter, poly-nuclear aromatic hydrocarbons (PAH's) or unburned hydrocarbons, according to the company’s website.

The Calgary-based outfit has been seeing revenue and profits grow in recent quarters, lending to a hefty appreciation in share value that has greatly outstripped the broad markets. In its last financial report at the end of November, Questor reported revenue of $2.99 million for the three months ended September 30. That was an increase of $1.88 million from the same period in 2012, or a surge of 168 percent. Gross profit also ballooned from $590,994 in the 2012 quarter to $1.34 million. Net profit was improved 426 percent, climbing to $817,840, or $0.032 per share, from $155,386, or $0.006 per share, a year earlier.

On Wednesday, Questor said that it used some of its cash to acquire ClearPower Systems, Inc. as it taps into the waste heat to power distributed generation and cogeneration industries. The two companies are a great strategic fit as more and more commercial and industrial facilities are employing technologies to efficiently employ waste heat to save money and reduce their carbon footprint. ClearPower has developed a 50-kilowatt organic Rankine cycle, or ORC, system that converts waste heat into power. The system can be driven by any waste heat source and can be paired with Questor incinerators to generate power.

In short, Questor will use the ORC system to capture waste heat from its incinerators and convert it to electricity that can be used on site or sold to utility companies. In combined heat and power systems, a single source fuel is used to create two forms of energy, typically electrical and thermal, hence the name “cogeneration.” Waste heat from generating electricity is captured and used for different types of heat (source heat, space heat, hot water, etc.).

Questor acquired all of the shares of ClearPower for $900,000 in cash.

At this time in 2012, shares of QST were trading very sporadically (there’s only 25 million shares outstanding) around 45 cents. Since that time, volume has become steadier and the stock price has been on an upward trek, rising to an all-time high of $2.42 on January 20, representing gains of 437 percent in one year. After closing Tuesday at $2.16, shares are up 6.5 percent at $2.30 in Wednesday morning action following the acquisition news.

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