Energy infrastructure micro cap Sky Quarry soars on Nevada refinery launch

Shares of Sky Quarry, an energy company with a market capitalization of just $9.11 million on the Nasdaq, soared 62% on Monday. The company announced that its refinery, the only one in the Western U.S. state of Nevada, is ready to begin operations following upgrades. That comes as other companies are reducing refining capacity, which should give Sky Quarry a strategic advantage, the company believes.

Sky Quarry shares jumped 62% on the Nasdaq on Monday to close at $1.90 apiece. In premarket trading on Tuesday, the stock had given back 16% as of this writing. The rally began after the company said its Nevada refinery is ready to begin operations in July following extensive upgrades. 

The refinery launch marks a turning point for Sky Quarry's business, according to the press release. The company initially focused on processing reclaimed asphalt materials, but several years ago decided to build a vertically integrated business. To that end, in October 2022 it acquired Foreland Refining, whose principal asset was a refinery in Nevada. Since then, the facility has undergone extensive upgrades and preparations for commercial operations.

With the refinery coming online, Sky Quarry will shift its focus toward production and customer deliveries, thus generating cash flow, interim CEO Marcus Laun said in the press release.

Sky Quarry's refinery will be the only operating one in Nevada, a state that has historically depended on fuel imports from other regions, the company said.

At the same time, several large refining facilities in California have recently either ceased operations or announced plans to do so, removing refining capacity from the broader Western U.S. market, Laun noted. Against that backdrop, he said Sky Quarry's refinery occupies a unique position within the regional supply chain, making it a strategically important asset in the region.