Velocys Share Discussion Threads

[dogwalker] 02/6/2017 08:06

On balance, if anything , I'd guess the USA's climate change agreement withdrawal will be good for sentiment around & about VLS.

[deutsch3] 01/6/2017 13:00

If so they would be unwise to go into the brewing industry!

[thebigshortfella] 01/6/2017 11:59

Mmmm...you could almost draw a straight line from 70p and ski down it...

My original trade was at 39p and I will be sorely tempted to place another one if it gets to that level (which looks like it's on the cards). It's a gamble as to whether VLS can make something happen in the next 12 months or not...

I have nothing but a gut feel to base this on but I am wondering if VLS management have lost their belief in marketing this as a solution and whether they are looking for a buyer behind the scenes to offload the technology onto...

[beeezzz] 31/5/2017 12:58

D3....That's AIM for you, overpaid and bone idle, unless they get off their backsides this will just wither on the vine......Cash going out the door with no sign of any coming in...this reason they need partners is they are short of the sort of money needed to expand.

[deutsch3] 30/5/2017 10:25

I can't believe that the Management and workforce are sat on their hands waiting for one partner or another to come up with an order. Worse still sit around waiting for government grants. - Where is the engineering spirit? - Why not a 'small scale ' pet project fizzing along making product, proving the commercial viability, and available for demonstration to all who are interested. Why are we always waiting for others?- With the amount being spent (including salaries) a small stranded fracking site for 'in house' use would be simple and a marvelous piece of marketing. - Oh and yes, a bit of real income to massage expectations. - Far far too laid back in my view!

[supernumerary] 30/5/2017 09:46

EJ - in the absence of news the share price will do what it inexorably does with all AIM shares - fall. Maybe not a compelling reason to sell, but certainly enough to give pause for thought. Without good news the recent lows around 30p beckon...

[thebigshortfella] 30/5/2017 09:22

Erogenous jones - I completely agree with you. There seems little incentive to trade VLS unless the share price falls below 40p.

[fluky] 23/5/2017 12:42

Visionon: Nobody has advanced very far. Fulcrum is maybe a little ahead of Red Rock Biofuels. I mentioned this because SH stated “they’re the only people in the industry who are doing this…”
The $80 is an engineering estimate and indeed a simplification. I consider the RINs and other governmental “help” risky business in the current volatile situation caused by the US president. In addition, the biobased feedstock is less expensive than natural gas, but the preprocessing requirements increase CAPEX and OPEX costs.
I fully agree that any wise investor will only consider the ENVIA technology after a 6 month run at nameplate capacity. Unfortunately, that pushes a positive cash flow further out.

[visionon] 23/5/2017 08:19

hxxp://www.renewableenergyworld.com/articles/2011/11/waste-management-invests-in-fulcrum-provides-70m-debt-for-first-commercial-project.html

Fluky you say "the point is they haven't advanced very far". I suggest you check the date of this article. Time is relative. WM invested in Fulcrum for a plant to be ready in 2013. Now Fulcrum are talking about 2018, albeit that the waste sorting plant is I believe done.

We await news on missing parts of the turnkey jigsaw, in particular EPC partner and funders. I'm guessing that will come when ENVIA has been running at nameplate capacity for at least 6mths. No one likes hasty PR. I think PIs should either be patient or move on to other shares, if indeed they are genuinely holding shares in VLS in the first place.

Your $80 is with respect a simplification. It depends also on feedstock cost and whether RINs apply. My impression from reading various journals is that there is a strong demand for home produced biodiesel in the USA. And if it's cellulosic you get more RINs. Plus it is using crop and forestry waste, not the crop itself.

[fluky] 22/5/2017 17:14

SH: Although Velocys has announced their new business model in December ’16, they had already functioned as a “systems provider” since they acquired Pinto Energy in June ’14. Pinto Energy became “Velocys Project Solutions, LLP” to do exactly that. There partners were manufacturing partner, Shiloh Industries, for the reactors and Ventech as EPC and module construction partner. The latter invested $1.3M in Velocys. Since the announcement of the new business model, Velocys partnered with Morimatsu, module design and construction company, and with TRI, steam reforming gasification systems for biomass.
The point is that they have not advanced very far. Saying that you are a one-stop shop for a BTL plant is one thing, having the necessary credibility is another one. The only fast way to have a credible offering is to have a successful demonstration, which hopefully is ENVIA in a few months, and to partner with a solution provider with many successful operating projects. Velocys by itself, even with the current partners, does not have the resources nor the credibility to get there. The move from a technology provider to a project provider is a difficult one and requires much more than to partner with companies that will share cost and add operational experience.
Lastly, it is all about economics. If the Velocys’ offering would be able to produce FT products at a cost 50% below the market prices, they would have sold the process many times. Unfortunately, as long as the crude oil stays below $80 per barrel it will be difficult to find a niche project.
Are they the only people doing this? Have a look at Waste Management’s 2016 Sustainability Report. Page 47 lists ENVIA Energy’s competitors, Enerkem and Fulcrum. (www.wm.com/sustainability/pdfs/2016SustainabilityReport_WM.pdf)

[sheep_herder] 21/5/2017 10:30

Deutsch - "no one told private investors"? I don't understand that comment. They've clearly stated the new strategy which has been RNS'd and published.

What lessons are you referring to?

[deutsch3] 21/5/2017 09:01

SH - You could have said in one line what I have said - 'the company has changed its business model'. - Trouble is no one told the private investors they were doing that.
Consequently the share price has fallen to its present level incurring substantial losses for some investors. Trouble is also that the losses have fallen on the Pi's who had faith in the old/original model. - You may well be right about the future but the fact remains that throughout this change the management have been on a gravy train and have kept things quiet to protect that. - you may feel you bring enlightenment to the party but I am afraid that you too have a number of lessons to learn judging by your observations and assessments.

[sheep_herder] 20/5/2017 21:17

I do find all the recent posting hilarious. I've managed to hold off posting until now.

b and D, you don't really seem to have a clue about the business prospects, the industry, or the issues involved in bringing these sort of projects to market.

The company has completely changed its business model recently. Since the 13th December they've moved from a technology provider to a systems provider. I haven't been invested that long but I'm assuming the lead time of projects, the delay in governments investing in these projects, and the general disbelief in the technology have all played their part. Either way, the current company has been existence since Dec so trying to judge their progress since then is a little bit pointless.

VLS have moved from a technology company to a full service supplier. They have correctly realised that there isn't the experience in the industry to build a plant such as Envia without significant hand holding. This is new technology and it's obviously harder to bring to market than they originally thought. Or there are cost/business reasons that prevent companies committing to invest in plants.

So what do you do if no one wants to take on a project 100%? You turn to providing a turnkey solution to the problem. You move from a pure technology provider to a project provider. You partner with companies that will share the cost and add operational experience.

VLS is back at square 1, but having proven the concept in Envia and with a bunch of partners involved. They have just raised some funds and will probably do so again in the near future. The fact that they have a partner for the BTL solution is a huge endorsment but again, the product of that relationship is likely 2-4 years away.

If you look at how long Envia has taken to get to this point I think it's quite clear how far out our end point is. Anyone thinking of a quick buck is mistaken. Unless of course you're a guru trader who can work the swings.

My view is that the company will need at least 1 more funding raise. The current raise seems to be for the initial engineering purposes in order to bring the BTL product to market. This is going to be a long drawn out project. It is the one of the first of its kind; it requires cooperation between multiple technology providers; it requires governmental funding. Take your best guess and double it. That's a good engineering estimate.

Talk about the fact that the company is "searching for government grants" is also way off the mark. If you are a new technology provider looking to make waves in the industry, do you go it alone or try to win government funding for certain projects? Can you take a double win of not only proving your product to the industry as well as getting paid to do it, or do you chose to go it alone and try your luck. FFS. This is business 101.

I think the company and the management are doing a grand job. The business model has clearly changed and they're adapting to a new environment. Talk of them being out of their depth is ludicrous given they're the only people in the industry who are doing this.

If people want a more assured bet, then something like SDX where they have production in addition to their exploration side, might be more compatible with their misunderstanding of the exploration side.

There seems to be a complete lack of intelligence in what an engineering company does. Engineering is about solving the issues that come up on a daily basis. Not every problem is solvable. Sometimes you might have to tell your boss that what you once thought was possible, actually isn't. And I speak as an engineer doing stuff that has been done many times before, let alone stuff at the cutting edge of GTL.

[deutsch3] 20/5/2017 20:08

S - Cheers!

[supernumerary] 20/5/2017 14:02

D - there's an 'edit' button next to the header line on your original post. Use it and you can edit the original in situ - you don't have to replicate the post.

[deutsch3] 20/5/2017 12:15

'typing corrections '

Yes correct they have pursued an additional financing package based on information that is only know to a few - We are outstanding lots of information much of which is/was time sensitive in the context of making or changing investments. Time for the Board to come clean and then hopefully we can all move on.( of course there is always the thought that a reducing share price suits somebody? - Who?)

[deutsch3] 20/5/2017 12:13

The have pursued a additional financing package based on information that is only know to a few - We are outstanding lots of information much of which is/was time sensitive in the context of making our changing investments. Time for the Board to come clean and then hopefully we can all move on.( of course there is always the thought that a reducing share price suits somebody? - Who?)

[beeezzz] 19/5/2017 16:57

Well next news should be full capacity, if they are experiencing lack of feed they should have informed investors.

[realfreeloader] 19/5/2017 13:56

If I can add to this discussion, regarding WTL plants. From previous research it seems many waste operators have set up electricity generating plants, which are a necessity to gain supposed "green credentials" regardless of the emissions, but which remain unprofitable. A small scale WTL plant would seem to make more financial sense (when/if the tech is proven). The size of some of the WM landfills is staggering they have a bioreactor landfill program which "favours beneficial gas use projects".

hxxps://www.wm.com/sustainability/pdfs/bioreactorbrochure.pdf

Also,the aviation industry wants to continue to expand but are fighting increased scrutiny regarding emissions. " Emissions from the aviation industry globally are expected to triple out to 2050 without additional action". technology, operational improvements and alternative fuels will all have their part to play.

[beeezzz] 19/5/2017 12:05

Fluky - I think your analysis is right, they have a product but not sure where the market is, whether they go for micro, small, or medium size systems, the company has lost its way. In the end you have to blame the management, I listened to the CEO webcast he'll tell you what you want to hear like all CEO more interested in protecting their fat paycheck than any consideration for investors.

At the end of the day it all comes down to economics, if there is cheaper and easier way then why invest in huge plant, only through grants and subsides will authorities and investors consider this option.

They have gone the more expensive route on financing, maybe thinking they could not get a placing away easily...also Jet fuel is reflected in oil prices so if oil goes down so does Jet fuel.

Saudi's are running a massive trade deficit these days they can't afford to let the oil price go down, so they keep bracing the market for low production in order to keep it up, yet cry wolf to often, however, this defeats the object sell less at higher price is the same as selling a lot at at a lower price.

China will turn down at end of year according to most commentators, we'll see where price is then.

[supernumerary] 19/5/2017 00:35

fluky - I agree - I've noted in previous posts that vls now seems to have all the costs of a large operator without any of the subsequent benefits of scale...

[fluky] 18/5/2017 22:39

This is quite an interesting discussion.
The fact that the ENVIA plant is not running smoothly and has not reached its nameplate capacity is not necessarily due to Velocys. Other processes such as the supply of clean landfill gas to the steam reformer and the downstream process are not Velocys' responsibility. The FT reactor is an essential but only a small part of the whole plant and consequently, Velocys' role and influence is limited, notwithstanding the increased investment and loans. Have a look at the ENVIA website and one immediately get the sense that there is not much push from the venture to build a successful business.

The point made in the previous postings that the "small scale" description has indeed been abandoned because a plant on a truck is not feasible, at least not with the current process technologies. In a first approach, Velocys tried to design also a microchannel based steam reformer to convert methane in syngas. This was tried at the 20 bpd demo plant at Petrobras, obviously without success. The microchannel steam reformer process technology was abandoned without much fanfare.

Have a look at INFRA Technology's 100 bpd plant which has started up in Wharton, TX (hxxp://en.infratechnology.com/news-1/135/). You will immediately understand that a 100 bpd is not a plant on a truck. Unfortunately, the economics do not scale down very well...