TIDMOCG
RNS Number : 6034X
Oxford Catalysts Group PLC
17 February 2012
17(th) February 2012
OXFORD CATALYSTS GROUP PLC
("Oxford Catalysts" or "the Group")
Trading Update
Oxford Catalysts Group PLC, the leading technology innovator for
clean synthetic fuels, is pleased to provide an update on
trading.
Market conditions for distributed scale synthetic fuels
production are better than at any other time in our experience, and
the Group is enjoying record levels of interest and enquiries in
its technology.
The energy world is changing, with oil majors having to look to
different sources of fuel. The hydrocarbons that have long been
considered too expensive and difficult to extract, such as shale
gas and oil sands, have now been re-evaluated and we're seeing
significant expansion in these programmes with the large-scale
entry of major energy companies. The US is the driving force behind
this. As the increasing demand for oil and sustained production
constraints have continued to drive and maintain crude prices over
$100 per barrel, gas prices have remained low and are forecasted to
continue to do so. Consequently the environment for synthetic fuels
production is increasingly attractive, especially in North
America.
Oxford Catalysts continues to actively evaluate partnership and
sales opportunities with major corporations, and has been engaged
in and successfully progressing through extensive engineering cost
studies with a number of significant prospective customers. These
have demonstrated consistently attractive economics for its
technology under a range of market scenarios and across several
applications. The positive industry feedback being received further
validates the Group's confidence in the strong competitiveness of
its products.
These factors have already translated into orders, with the sale
of five commercial scale Fischer-Tropsch ("FT") reactors and
catalyst announced to date: two units to SGC Energia, SGPS, S.A.;
an order by a Fortune 500 company in July 2011 for two full scale
FT units that form the first instalment of reactors towards a
commercial synthetic fuels plant; and as announced in January 2012,
an order for a full scale FT unit from a diversified energy
company. The latter will provide detailed engineering parameters
for that customer's first plant, being part of their plan to
aggressively pursue production of synthetic fuels through medium
scale modular facilities located at sites internationally.
These orders are an essential precursor to widespread adoption,
as they allow for further validation of the technology on larger
scales and follow the positive progress made at our previous
successful demonstration in Gussing, Austria. Demonstration
activities there are now complete and the FT equipment is in the
process of being returned to the Group's US site where it will form
part of an integrated Gas-to-Liquids ("GTL") pilot plant alongside
the Group's Steam Methane Reforming ("SMR") and hydro-processing
technologies.
This integrated pilot plant continues the Group's investment in
infrastructure to assist commercial activities, including client
evaluations and client operator training. In 2011, the Group also
stepped up other activities in support of commercialisation,
including the addition of key staff, substantially enlarging both
the process engineering and business development teams, as well as
appointing a Group Chief Operating Officer.
The Group's integrated GTL demonstration, which includes both
its FT and SMR reactors, began operations in Fortaleza, Brazil in
late 2011. This project has been entirely funded and managed by
Toyo Engineering Corporation ("Toyo") and MODEC, Inc. ("MODEC") in
collaboration with Petroleo Brasileiro S.A. ("Petrobras"). As with
most field demonstrations, the precise timing of this programme is
subject to change and therefore cannot be reliably estimated,
however the Group remains confident of a successful outcome and is
encouraged by the level of support and commitment being provided by
Petrobras, Toyo and MODEC.
Additionally, the Group is pleased to report the attainment of a
significant milestone of over one year of successful continuous
operation of its FT catalyst. This long duration test provides
further validation of the superior performance of the Group's
technology and the impressive stability of its FT catalyst.
Activities to advance supply chain capabilities to support
higher volume sales have made good progress over the course of the
year. The Group is comfortable of its ability to supply both
catalyst and reactors for orders in 2012 and beyond. In addition,
the Group is developing key partnerships that will provide
engineering and other capabilities to execute and support new
projects and customer installations.
Reflecting the Group's ongoing progress towards
commercialisation, revenues are continuing to transition from
development funding to commercial income streams. Consequently and
as expected, revenues for the financial year ended 31(st) December
2011 are estimated to be lower than 2009 and 2010. The Group
continues to maintain a healthy cash balance to support this phase
of its commercial transformation; as at 31 December, year end cash
stood at approximately GBP17m.
Roy Lipski, CEO of Oxford Catalysts Group said:
"The Group's had another successful year and continues to make
good progress towards commercialisation with existing, new and
potential partners. Underlying market conditions remain very
favourable and industry continues to recognise our technology.
We're well placed in the market and have a healthy cash position.
2012 looks set to be a significant milestone year for the
business."
The Group will report its Final Results by 31(st) March
2012.
- Ends -
For further information, please contact:
Roy Lipski, CEO, Oxford Catalysts and Velocys +1 614 733 3300
020 7397 8900
Ken Fleming / Beth McKiernan, Cenkos Securities /
(Nomad and Broker) 0131 220 6939
Billy Clegg / Alex Beagley, FTI Consulting 020 7831 3113
Notes to Editors
Oxford Catalysts designs and develops technology for the
production of clean synthetic fuels from both conventional fossil
fuels and renewable sources such as bio-waste. The Group is
primarily focused on the emerging market for distributed scale
production of synthetic fuels via Fischer-Tropsch ("FT") synthesis
- a market that has the potential of producing as much as 25
million barrels of fuel a day.
The FT reaction is used when converting natural gas, coal or
bio-mass into clean high-performance liquid synthetic fuels,
processes known as GTL, CTL and BTL respectively. The Group is the
recognised world leader in the design and development of
high-activity catalysts and associated novel chemical reactors for
the small scale production of synthetic fuels. (The Group's reactor
technology - known as microchannel process technology - is marketed
under the brand name of Velocys).
Oxford Catalysts Group PLC is listed on the AIM market of the
London Stock Exchange (LSE: OCG). The Group has some 85 employees
with facilities near Oxford, UK and Columbus, Ohio, USA.
www.oxfordcatalysts.com
www.velocys.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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