Nevada's only refinery enters production

Sky Quarry Inc., an energy infrastructure company focused on domestic refining and resource development, announced an update on its Nevada refinery operations provided by the company's interim chief executive officer, Marcus Laun.

"As Sky Quarry approaches the commencement of refinery operations at Foreland Refinery in Ely, Nevada (Foreland), in my role as the interim chief executive officer of Sky Quarry, I wanted to provide an update on our progress and discuss the next phase of Sky Quarry's development."

At the center of the Sky Quarry story is a simple fact: Sky Quarry controls what we believe is one of the most strategically positioned refining assets in the Western United States - Nevada's only operating refinery.

"While energy markets often focus on fluctuations in crude oil prices, the more important long-term trend, in my opinion, is the continued reduction of refining capacity across the Western United States," provided Mr. Laun. "As refining capacity exits the market and regional demand for transportation fuels remains resilient, strategically located refining infrastructure is expected to become increasingly valuable."

What this means for the West

Nevada remains one of the most fuel-import-dependent states in the nation. Despite consuming substantial quantities of gasoline, diesel and other refined products, the state has historically relied on fuel imported from neighboring regions. Sky Quarry's Foreland Refinery occupies a unique position within that supply chain, with the potential to provide refining capacity directly within Nevada and serve customers throughout the broader Intermountain West region.

At the same time, the regional refining landscape continues to evolve. Several large refining facilities in California have recently either ceased operations or announced plans to do so, removing meaningful refining capacity from the Western market. While no single event defines long-term market dynamics, the broader trend toward reduced regional refining capacity reinforces the company's conviction in the strategic importance of existing refining assets that can meet regional demand.

Against this backdrop, Sky Quarry's team has remained focused on preparing Foreland for sustained commercial operations. We are now in the final stages of that process and expect to commence refinery operations in July.

Capabilities of the Foreland Refinery

Recent work at the Foreland Refinery site has included repairs, upgrades, and enhancements across critical operating systems, including storage infrastructure that provides the company with more than 100,000 barrels of total storage capacity. This storage capability is expected to provide operational flexibility and represent an important component of the refinery's long-term value.

"Importantly, Sky Quarry's Foreland Refinery is entering operations with inventory already in place. The company currently has approximately 10,000 barrels of crude oil and in-process inventory on-site, moving through the refining process. We believe this inventory represents both operational readiness and an immediate working asset as production begins. As operations ramp up, we expect this inventory to provide both operational flexibility and immediate participation in the value-creation process associated with refining crude oil into refined products."

Perhaps most importantly, Sky Quarry is approaching a fundamental transition in its corporate evolution. For much of the company's recent history, management's focus has been centered on repairing infrastructure, securing working capital, strengthening the balance sheet and preparing Foreland for operations. As refinery operations commence, Sky Quarry's focus shifts toward production, customer deliveries, operating margins and cash flow generation.

The future outlook for Foreland Refinery

This transition marks an important inflection point. The value of the Foreland Refinery has historically been viewed through the lens of its potential. As operations ramp up and throughput increases, the refinery will be increasingly evaluated based on its operational performance, cash-generating capability, and strategic position within the Western fuel market.

As a refinery operator, the company's economics are driven primarily by refining margins rather than crude oil prices alone. Crude oil is the principal feedstock used in operations, and lower feedstock costs can be beneficial when refined product demand and pricing remain healthy. The company's focus remains on operating efficiently, managing costs and capturing attractive margins through disciplined execution.

Beyond the refinery itself, Sky Quarry now possesses a combination of assets that is increasingly difficult to replicate: refining infrastructure, substantial storage capacity, access to regional crude supply, operating permits, customer relationships and a strategic location serving a fuel-deficient market. Collectively, these assets position the company within a sector where replacement refining capacity has become increasingly scarce.