Velocys Share Discussion Threads

[supernumerary] 18/5/2017 22:17

D - I agree, more or less. I gave up here some time ago, when I realised that I didn't really understand the business model, and what I did understand of it I didn't like.

When I first got involved I thought I was buying a technology company with a unique set of products - modular small-scale F-T and the catalysts to go with it, all patent-protected. I assumed they'd sell their technology to all-comers, then sit back and reap ongoing rewards from royalties and catalyst sales.

Now it seems they're more like an oil exploration company - they have to find the sites, organise (if not actually provide) the funding, get involved in the permitting and design and operation - it's a never-ending money pit. All fraught with execution risk over very long timescales. It just didn't strike me as an attractive business model, so I left, with some regret.

[deutsch3] 18/5/2017 21:42

Trouble is that in no longer sounds like a production line product that can be strapped on to a gas supply anywhere in the world. We now have a situation where a new order becomes a custom built turnkey project with long lead time and dependent on government grants and a dedicated installation team.- This 'Small scale' description has been stretched to breaking it seems. Anyone else got a view? - The management don't seem up to the original idea and ambitions. - The old story hide big salaries in large long term projects with governmental backing and laid back delivery dates.

[sheep_herder] 18/5/2017 20:30

My 5-10 years was in response to your question about when they'll be able to drop them in quicky and turn around projects in months not years. Of course they'll have more projects up and running by next year. It sounds like the BTL one will be next but that's what, at least 12 months away. I doubt they have the expertise or manpower to run two projects in parallel. So within 5 years I'll expect them to have commissioned the BTL plant and the Asian stranded gas one plus have other plants in the pipeline.

[thurgarton1] 18/5/2017 18:39

Given your pessimism, I presume you are also expecting aircraft to stop using aviation gasoline and high grade waxes to be athing of the past. Too quick to judge IMHO. You might try this link to see what the Company CEO thinks:

hxxp://webcasting.brrmedia.co.uk/broadcast/591d7640f808d0686c55e6f6

[beeezzz] 18/5/2017 17:38

Your having a laugh, I'd stick to looking after your sheep.

5-10. Listen they don't get an order by the end of this year or very early next then you can say goodbye to your investment. You can forget oil prices going up the only way is down, with EV's and hydrogen cars starting to flood the market in 5 years you won't be able to give the stuff away, no one is going to buy one of these plants they are not viable, 15 years Oklahoma plant from concept to completion.

I do have experience in R&D, and design. Obviously it will need commissioning like any plant, one that runs under pressure you are mainly looking for leaks bad seals on parts assembled after manufacture. Experienced commissioning agent would need no more than 3 months. Considering commissioning started 21st Sept 2016, which most had been done.

Velocys is proven technology in the Lab, pilot scale and demonstration scale, so what is left to do. Considering they produced first product in Feb 2017, it would have been possible to give a time frame to full capacity which they have not done.

"Construction complete at ENVIA's GTL plant

Velocys plc (VLS.L), the company at the forefront of smaller scale gas-to-liquids (GTL), is pleased to announce that construction of ENVIA Energy's GTL plant in Oklahoma City is now complete. On-site loading of catalyst into the Fischer-Tropsch reactors has been completed by Velocys with support from its internationally-recognised partner, Mourik. Photographs of recent progress on site are available here.

Highlights:

Construction of ENVIA Energy's GTL plant in Oklahoma City complete.

On-site loading of catalyst into Velocys reactors complete.

Pre-commissioning activities substantially complete.

Early commissioning steps begun.

ENVIA GTL plant provides a commercial reference site for the Velocys technology.

Drawdown of Velocys' US$9 million senior loan to begin in Q4 2016.

Pre-commissioning work, including hydro-testing of the lines and vessels, and a rigorous inspection process, is substantially complete. The team has made extensive and detailed preparations; operating manuals and procedures have been completed and robust commissioning and start-up plans are in place. In line with best practice, the commissioning plan will ensure that each process system in sequence is working robustly, safely, and within specification, in order to best assure a successful, safe and uneventful plant start up. Early commissioning steps have begun."




Well this bloke is looking through rose tinted glasses, not sure if he would say the same today....This company will run out of money, they will run out of scams to tempt unwilling investors...No revenue means a slow decline and finally give up and go bankrupt.

[sheep_herder] 18/5/2017 16:35

I think in 5-10 years they'll have got it down. But right now, isn't the next plant a BTL which means that it's a different set up with different technology. Until they get experience on all plant types then they won't be able to optimise them much. It's going to be incremental and a long haul. All of the new partners will be in the same boat. This is cutting edge technology and they'll all be learning as they go.

[deutsch3] 18/5/2017 16:15

Fine, I hear what you say, but is the next plant going to take as long? - Not small scale to me. What happened to 'at GTL unit on a skid'? - Somebody is extracting the urine without telling us when to laugh!

[sheep_herder] 18/5/2017 15:18

Deutsch3, think how long it has taken to get ENVIA running and apply that to all the other projects. I don't know what is hard to understand about the complexities, timescales and funding issues that the company has in bringing these sites online.

[deutsch3] 18/5/2017 14:55

I have listened to the webcast and am more confused than ever - It's still Jam Tomorrow, no enthusiasm, still working towards a 'plan', still building up finances???
I do not know now whether we are a small scale GTL, a medium scale GTL, or what.
Up to now the investment cost has been outrageous with so far no product coming out of the pipe?? - Why all this large scale long lead time projects. And why are we dependent on USA grants and legislation?? - Is there not a stranded gas supply somewhere (in the planet wherever) on top of which we can fix a GTL unit? - Our have we not now got a market? In theory the oil/gas price, which is now much lower than a few years ago, should be 'as our feedstock' as massive benefit. Who has a gas well not nowcost effective at today's price that is crying out for a means to recoup some revenue?? - Something is not at all comfortable about all of this!

[sheep_herder] 18/5/2017 14:51

beeezzz - sorry for the slow reply. From your posts I'm assuming that you're not an engineer then.

Of course they'll have teething problems. Translating what is seen in the lab to real world usage isn't plug and play. Would you be happy if they built a nuclear power station near you and said, "Right lads, beeezzz reckons we don't need to commission the reactor, just wack it on full and lets see if she holds.". lol

Engineering is about running things for the first time, analysing what went wrong and is different to your model, and iterating. An engineers job is really just problem solving. To think that they can just turn it on and everything is fine is naive in the greatest.

[gac141] 18/5/2017 14:03

Latest Webcast.

[dogwalker] 16/5/2017 20:55

And some of us just can't help being right, ... No, I'm only joking, I hope. A lot can happen in 7 months.

[thebigshortfella] 16/5/2017 20:13

fluky - kudos to you. You were right that VLS needed money. I suspected you were right based on the falling share price and the fact that David Pummell (on the recent videos) looks like a man who had to measure his own grave and isn't sure if he got the measurements correct. Not a confidence builder...

I would like to do another trade on VLS but not at a price greater than 39p. This remains high risk/high reward punt...

[visionon] 16/5/2017 18:51

Xmas share price competition

Fluky 125p subject to various caveats

There gac141 that should reassure you ;)

A is for Agenda

ps dog walker still leading at 43p, only 7mths to go

[realfreeloader] 16/5/2017 17:40

It seems the FT reactors are not the problem so from that point of view the years in the lab have not been wasted. I find it hard to believe that the team will be unable to bring the plant up to capacity.

As for the fund raise I was hoping that this would be done via Loan notes. If voted through there will be an additional £6 million of loan notes available if needed. Ervington will not be able to convert the majority they hold into shares or they will go above 29.9%. The 18 month pay back period should allow for ENVIA to become cash flow positive and the loan to ENVIA to then be repaid. I believe Ervington will remain supportive, their eye is on the future GreenSky project. UK government is supportive of sustainable aviation biofuel being eligible under(RTFO), the consultation has closed so it should be announced at some point this year. A fund raise in 2018 with the ENVIA plant at capacity should give a lot more visibility to the future of VLS.

It hasn't gone to plan but the doubts over funding for the short term, if passed, have now been dealt with, with minimal dilution.

The new NED should be a useful addition.

[beeezzz] 16/5/2017 17:15

Sadly this reminds me of ITM.....loads of orders yet certainly not reflected in the share price

AIM companies cannot be believed, you got CEO paying themselves £½m pa and yet not a sodding penny in profit, no incentive to achieve FA, just one big cushy life.

[beeezzz] 16/5/2017 16:55

So where is the difference from the lab model and the pilot plant other than scale, if you have proved something in the lab and it works WTF are we dealing with, when will they tell us, if there is a problem I want to know.

[gac141] 16/5/2017 16:13

Really!- Come on guys some of this commentary is so wide of the mark. As someone said before it was not a box set of meccano. The Pilot plant was 1bpd this is 350 ish it doesn't just scale up.

[fluky] 16/5/2017 14:44

Beeezzz: since ENVIA has only drawn $0.4M of the VLS loan at the end of 2016, $12.3M will be used to get ENVIA running in 2017. This is exactly the amount of the last raise!
The burn rate has improved, but it is still around $1.5M per month. This means that at the end 2017, assuming that ENVIA consumes the VLS loan, they will need another raise.
With an empty order book and a struggling ENVIA the outlook is grim.

[runthejoules] 16/5/2017 14:01

If they were just to promise monthly progress updates on their website then frankly that would buoy the share price up right away.

[sheep_herder] 16/5/2017 13:49

beeezzz - that statement sounded to me like it was for future developments that are in the pipeline. I also don't understand your comment regarding the commissioning. It's not a mechano set - you can't just plug it together and turn it on hoping for the best. Envia is a huge success and they now just need to ramp to full capacity.

Deutsch3 - I thought the results were more verbose that I expected. A great amount of detail about what's happening.

Now it's just a case of waiting and seeing if anything else happens this year. From the sound of it, they're handicapped by the time it takes to get these projects funded and through the relevant authorities. I like their plan and it seems sensible given the lack of forward visibility in how long everything will take.

I'm now not expecting any further excitement for a year plus so I wouldn't be surprised to see a lot of people exit out of boredom.

[deutsch3] 16/5/2017 13:25

This management team fall well short. Do they realize that investors need to know whats happening with their investment? - good, bad or indifferent. - It is not a game and this is supposed to be real plant and projects,and not a laboratory experiment anymore. - What sort of watch do the regulators of AIM keep on these things. - Things need to sharpen up quick - (if it's not too late). Too much manipulation going on, not enough information given out on time as it happens. Only the chosen few are in the loop as the last RNS reveals. Most of the private investors would die for a 8% return
on their investment with the capital amount secured. All manipulation and very bad form!- If the initial results where as good as reported then a placing at a premium would and should have been possible. Very smelly!

[beeezzz] 16/5/2017 13:25

No it was this statement regarding what the money raised will spent on...they do not give much away but it seems an inordinate amount of time commissioning ENVIA plant

"Velocys said the proceeds will be used to provide working capital and drive specific activities such as initial plant engineering and project development. USD3.4 million of the proceeds will be used to enlarge the loan which Velocys made available to ENVIA in January 2016 to USD12.7 million from USD9.3 million. This will help the plant achieve steady state operations over the coming months."