RNS Number : 6034X
Oxford Catalysts Group PLC
17 February 2012
17(th) February 2012
OXFORD CATALYSTS GROUP PLC
("Oxford Catalysts" or "the Group")
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.
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