Velocys Share Discussion Threads

[way2000] 23/7/2017 14:36

Change in tack- change in fortunes.From my experience in the US markets, people do like to get involved in the new tech once it has been proved. Perhaps we are reaching that point.

[fluky] 22/7/2017 20:09

My assumptions/scenarios were posted in #3343 & 3345. Here they are:
#3343:
Velocys cannot survive this year without a cash injection. There are a few scenarios to get to year's end:
1. Another raise at approx 50p - probability: 5% - Will run into shareholders opposition because last round was at 225p unless VLS could grant them a deal.
2. An acquisition by a strategic partner - probability: 80% - would mean that the VLS shares are converted into cash and/or shares of the acquirer
3. VLS goes out of business - probability: 15%
If VLS stays in business I'll go for 125p at Christmas 2017. I'll go for zero in the other cases. In the latter case, the shareholders will have cash or shares equivalent to 55p VLS share price. I discard the "going out of business" scenario.
Thoughts?

I added later a 4th scenario, responding to Fern's comment:
#3345:
Good point. Let's add scenario #4: RA takes VLS private and buys out the other shareholders at 55p - probability 30%. Probability of scenario #2 goes down to 50%.
Fern5: what do you think?
-------

Now that I retrieved my old posting, I am surprised about my prediction of the raise at 50p...

[visionon] 22/7/2017 18:20

fluky perhaps you would care to share with us the assumptions behind your xmas share price entry of 125p

[gac141] 22/7/2017 16:24

As they are just assumptions I will wait until Velocys as some point publish some meaningful figures which will give all shareholders an insight into the potential.

They do plenty of presentations so now with ENVIA properly up and running they may include a slide on the economics...hope they do anyway.....

[fluky] 22/7/2017 14:42

gac141: all Ventech subsidiaries are in administration. They will do no more projects with Velocys. Fortunately, Velocys made an alliance with Morimatsu which is a more stable and better modular engineering company.
I am curious to hear more about your assumptions which lead you to believe that the 1400 bpd plant is a hugely attractive proposition.

[gac141] 22/7/2017 12:55

As far as NRG..

"Hi George,

Many thanks for your email. As you might suspect, the Company is limited as to what it can say in regards to NRG's news, however they do not believe it has any bearing on the ENVIA JV.

Do let me know if we can be of any further help"

Ventech has gone into administration but again the arm that is involved with ENVIA is a separate arm and no impact on ENVIA..Whether they do more projects is unclear.

WM on the other had could do many plants with our partners.... I am waiting for a response from the Governor of California to get their take on the Clean Fuels although from what they have said and done..David has made the right choice in his decisions.

I do not think the UK is anywhere near a lost cause at all!

I want Velocys to do some promotional stuff on the economics of a 1400 bpd plant. As mentioned before my assumptions which are just mine show a hugely attractive proposition. Once the market realises this ............

[visionon] 22/7/2017 11:14

hxxps://www.greentechmedia.com/articles/read/nrg-plans-sale-of-all-its-renewable-energy-projects

Interesting article about NRG divestment strategy. I wonder where ENVIA fits in. It could be an opportunity for a new investor keen on renewable fuels and wax to come in. Also given that Ventech are no longer the module fabricating partner maybe their investing arm might also wish to exit ENVIA and make way for a new investor. The logical time to do this might be late 2018 when VLS loan to ENVIA is due its interest (there is a year extension option on this also). By late 2018 the plant should hopefully have 12mths nameplate operating time under it's belt.

It also raises the question of whether ENVIA will do more projects in its current guise. Me thinks not but perhaps this is where VLS new consortium could step in ie doing other landfill gas to liquids projects with the likes of WM. But at larger scale than the assumed 350bpd existing project ie some better economies of scale.

Any thoughts gac ?

[gac141] 22/7/2017 08:52

I don't actually disagree with your thoughts visionon. Investors like flag ventures will definitely need to see continuous problem free production at ENVIA.

I still think we may have something to get excited about in the UK. Let's see if Ervington still have a hand to play?

As you say the Clean Fuels and waxes do have a market and one that is not filled by many. I am still very optimistic.

[visionon] 22/7/2017 08:37

gac141. I don't see Red Rock achieving financing before the VLS technology has achieved c5000hrs at ENVIA. It's a fundamental part of the process. So that would be Q1/Q2 2018 if all other aspects satisfy funders. Just my personal opinion. That would also perhaps coincide with VLS getting FID on their planned BTL plant.

patience is required...! but the landscape for renewable fuels and wax is looking increasingly attractive i.e. it may be a case of 2 buses arriving at the same time. UK folk should be well used to that concept.

meanwhile it will be interesting to see if any news flows from the Fulcrum Sierra Biofuels project during the coming months. that has been a bit quiet since BP invested in it last November.

[gac141] 21/7/2017 17:04

Baynes clarified to The Digest that the cessation of development of Joule’s technology by its investor set would not have any direct impact on Red Rock Biofuels, which was acquired by Joule and continues to seek to finance its first commercial plant to make diesel and aviation fuels from wood residues, under the management of Jeff Matternech and Terry Kulesa.

[visionon] 21/7/2017 16:50

Joule have gone bust. See Biofuels digest webpage. They say that Red Rock continues to seek funding for BTL plant.

There was always a split of opinions over whether Joule model worked and clearly low fuel prices haven't helped.

[visionon] 21/7/2017 14:53

summer hols have arrived !

[gac141] 21/7/2017 14:45

Indeed I am ..but sometimes we get someone new on board.

I am amazed the share price has not reacted up today. I think it helps de-risk Velocys.

And we are producing a commercial product.

Friday should be a good day generally for goodish news to be delivered. Obviously Velocys thought it was ok news otherwise we would have seen it slipped in on a Wednesday.

[visionon] 21/7/2017 14:33

perhaps fluky is trying to pick up shares cheaper before the march towards his/her xmas share price 125p.

gac141 I thought you would be well used to fluky by now.

[fluky] 21/7/2017 14:29

Why don't you ask Pummell what those "certain related activities" are.

[gac141] 21/7/2017 14:10

It only states that R&D in the UK will cease plus certain related activities at Ohio.

[fluky] 21/7/2017 13:40

gac141: I'd like to hear your view on cutting all R&D efforts.

[gac141] 21/7/2017 13:23

Fluky - your making assumptions again.

I have been in contact with Susan and she remains and will continue to remain a friend , supporter and shareholder in the company.

"While Robertson has left her board position, she will stay on in her CFO role to allow for a smooth transition"

[fluky] 21/7/2017 12:38

Susan's departure is another writing on the wall. Susan was a stablizing element in the board. She will be missed. John Tunison is a consultant and will not become a full time employee, see tunison.org.

[fluky] 21/7/2017 12:35

Cutting off R&D totally is jeopardizing the future for short term gains. Yes, the company is on the commercialization path of its current technology and it should put emphasis on this. However, completely cutting off catalyst development at Milton Park and reactor technology development at Plain City is a step towards the liquidation of the company. The only potential positive outcome is a takeover by a larger group which could sustain the necessary R&D efforts.

[gac141] 21/7/2017 11:38

Interactive investor..publish..below.

Velocys PLC reached a long-awaited milestone on Friday after successfully demonstrating its flagship Fischer-Tropsch technology can perform as planned at a commercial level following the start of production of saleable product from its US demonstration plant.



Shares in the company were trading 1.6% higher on Friday morning at 45.99 pence, adding further ground to the 25% gain seen since the start of 2017. However, shares have dropped considerably from the 2017-high of 91.75 pence hit in early February after producing the first-ever product from the demonstration plant.



The Fischer?Tropsch process is a set of chemical reactions that alters a mixture of gas into liquid hydrocarbons, and while the process already exists, it is currently confined to large scale plants and is only seen as economical when used to produce a minimum of around 30,000 barrels of oil equivalent per day.



Velocys, at the forefront of small scale gas-to-liquids as well as the biomass-to-liquid market, has now proven the process can be used at capacities as low as 1,500 barrels of oil equivalent per day.



Keen to prove its technology to stir up interest in the market, Velocys struck a deal to build a plant in Oklahoma City for ENVIA Energy to use as a demonstration plant. After finishing construction in the second half of 2016, slightly behind schedule, Velocys announced on the last day of June that the first finished saleable products had been produced at the plant.



Exactly three weeks later, Velocys has now officially declared that its Fischer-Tropsch reactors and catalyst meet the performance requirements at a commercial scale.



The achievement means Velocys is now transitioning away from its previous focus on developing its technology to one that commercialises its technology in "selected high value markets".



However, as a result, Velocys said its research and development base at Milton Park in the UK will close, while "certain related activities" at its facility in Plain City in Ohio, US, will also stop.



"The company will continue to maintain an ongoing commercial and operational office in the UK. The above developments will reduce the operational costs of the business on an annualised basis," said Velocys.



"Velocys will continue to grow its operational base in Houston, Texas and build the capabilities required to take forward its new biorefinery delivery business model with its strategic partners," Velocys added.



In another big change for the business, Velocys released a separate statement on Friday announcing the departure of Chief Financial Officer Susan Robertson after spending nine years with the business. She has stepped down from the board with immediate effect to pursue other business interests, and Velocys plans to take the opportunity to rejig the role moving forward.



The CFO role moving forward will now be based in Houston in Texas, as the company's focus on the renewable fuels market in the US will intensify.



Velocys has appointed John Tunison as interim CFO, who will provide the necessary support to the Company through a period of transition while it recruits a permanent replacement. While Robertson has left her board position, she will stay on in her CFO role to allow for a smooth transition. Tunison will not hold a board position while in the interim role.



Tunison has previously worked in "finance leadership roles" for companies including Royal Dutch Shell PLC, as well as chemical manufacturers and distributors Univar and Ascend Performance Materials.



"He has a track record in business planning, strategy development and execution, the reshaping of financial teams and the raising of equity in his varied roles in a number of sectors including oil and gas and speciality chemicals," said Velocys.



By Joshua Warner; [e-mail]; @JoshAlliance

[visionon] 21/7/2017 11:26

gac141. thanks for that. yes I could envisage M&A but well north of £1 a share and not for a couple of years i.e. When they have a BTL plant built and running. Of course if I'm wrong and the share price reaches fluky's 2017 xmas competition entry of 125p I won't be complaining ;)

[gac141] 21/7/2017 10:43

It is my understanding that we are not putting all eggs in one basket/ country...

[deutsch3] 21/7/2017 09:43

Is this redefining 'small scale' or abandoning it? - I do hate it when these companies change direction without any courtesies shown to the small scale investors. Right or wrong it does make for mistrust in the management. - A lot of people around the world aren't too keen on Americans. - Global is the name of the game now - we could end up becoming a one trick pony? (mustang by the sound of it)