Velocys Share Discussion Threads

[visionon] 30/8/2017 13:34

I see that Fulcrum now have a corporate video on their website. In it they talk about their facility being operational in 2020. That suggests to me that they might be looking at FID this year or early 2018.

To recap, the Fulcrum plant will produce 10m gallons pa from 175000t of MSW. So around 700b/d I would guess. They have it seems both a grant and a loan guarantee plus feedstock offtake and equity partners. All on the website. The slight unknown is who will build it and at what cost. It was to be Abengoa at $200m I recall but post corporate rescue that may change. The MSW sorting part is already built but it's not clear whether the $270m figure on the website includes the sorting part or is the GTL plant plus financing costs and fees etc. Maybe GAC will know ?

[deutsch3] 30/8/2017 13:26

Well, - the situation is that there is no useful production yet - is that it ? - That's nice. An explanation for the shareholders would be good. - It isn't positive comments from me that are needed - it is feedback positive or otherwise from the management that would help to explain the share price. - We do appear to have gone from 'the time is now' GTL small scale - to 'jam tomorrow' USA government grant funded multi partnered mega schemes which depend too much on politics and not enough on commercial strength.
We have the recipe it seems, but no cakes just yet! - Unless I am wrong that the present situation.

[visionon] 30/8/2017 13:14

EJ. I recommend the ADVFN filter for those posters that you feel add nothing constructive (be it bearish or bullish) to a thread. Only a month till the interims so one would hope that there will also be a newsletter/webcast before Autumn.

[deutsch3] 30/8/2017 12:25

There is nothing under the radar about that share price. I do agree however looking at the price graph over five years it probably can't be picked by radar now!

[meijiman] 30/8/2017 12:20

Billy Clegg at Camarco. Think he used to play for Barnsley. Trouble is the company might have told him to keep things under the radar for the time being........

[deutsch3] 30/8/2017 11:46

Why don't the Company show us a picture of the product? - better still why don't they show us a picture of a car, or better still an airplane, running on product? - Have they got the slightest inclination of marketing? - Somethings sadly wrong here!

[tongosti] 30/8/2017 11:24

Simple answer - share price says this company is a dog with fleas (as it has been for years). Whoever says the opposite better switch to astrology / fortune telling!

[meijiman] 30/8/2017 10:40

It is the company's role to also manage the share price. If the prospects are so good why has the share price tanked?

[haydock] 30/8/2017 09:43

Looking back at Malcy's blog in Feb.

Velocys
I recently met with David Pummell, CEO of Velocys, a company I have always found most interesting, if not usually rather too far away from visible progress. On meeting David again he greeted me with a glass jar and significant smile, a jar of wax made by VLS only 15 years after conception. With a plant now capable of making the product the key is how to leverage it and bring it to the market. The ENVIA plant in Oklahoma is the first smaller scale commercial GTL plant in the world and the opportunities are plenty, most important, these things are done in partnership which VLS have been building lately.
The company has a number of avenues to follow which shows important diversity and risk aversity, industries, technologies and geographies help to give balance and avoid any single market. These include focusing on the renewable jet fuel market in the US, stranded gas onshore in Canada and a number of ‘significant’ opportunities in Asia. The former has a substantial addressable market in the US for jet and diesel, up to 30 plants where VLS could put in kit and of course without doing the heavy lifting, design, build and hand over the keys is the mantra. Partnerships have been and will continue to be important, indeed take the potential with fuel traders with their need for credits, VLS have made a significant hire in this area already. Refiners and feedstock owners also come into this category as do airlines who will see increasing regulation on fuel blendings.
With regard to Asia much progress has been made in the last year and in the longer term I expect this area to be extremely valuable to the company. The size of the plants in China, made in partnership will be the most cost effective in the market and of course here, as in  the USA, bank financing and loan guarantees are available at the right times. I am reliably informed that much progress is being made in some key areas in China particularly where stranded gas is also a problem.
As time moves on there is little doubt that VLS is growing up, last years raise and a much lower cash burn helps and the balance sheet actually looks moderately healthy, by its standards. Shareholders appear to be highly supportive, the next year is looking increasingly exciting and  progress is looking as good as it has for a long time

[haydock] 29/8/2017 12:17

gac141

Very usefull, many thanks.
My gut feeling is I have been here for years. It used to be safely overvalued but stable.
Then with the CEO & the oil crisis the wheels fell off.

This share has more to back it up now than it did a few years ago. Yet look at the recent fall. Aim mkt plaything, but as the article above shows it will change again.
I was very impressed by the Bod handling of the figs early in the year, a great campaign that lead to a well justified rise.
I hope they can manage the mkt's well again soon.

I had it in mind to sell, but have re-evaluated this price in my thoughts & now see it as a bargain buy.

[gac141] 29/8/2017 11:33

I hope people don't mind me posting this again.

I genuinely think it is relevant and without a doubt in my mind will underpin a much higher share price than we currently have in the August doldrums.

"I have been doing a fair bit of research on a number of subjects and my investigations are starting to add up.

19th June Velocys plc (VLS.L), the company at the forefront of smaller scale
gas-to-liquids and biomass-to-liquids (BTL), is pleased to announce that the
U.S. Department of Agriculture (USDA) has invited Velocys to submit a Phase
II Application to obtain a loan guarantee for a commercial-scale
bio refinery. This invitation was made after a successful Phase I Application
process. The loan guarantee could apply to up to $200 million of debt as
part of the total installed cost of the project. My understanding is that this cash is “ring fenced” for Velocys and they just need to finalize the program they have agreed with the USDA.

1.
The plant is being designed to produce approximately 19 million gallons per
year (1,400 barrels per day) of advanced cellulosic renewable diesel. This will be a high value “drop-in”; renewable diesel fuel that has no blend wall restrictions and meets the stringent specification ASTM-D975. The feedstock is from approximately 1,000 dry tons per day of woody biomass residues in the Southeast U.S. There is an abundant supply of low-cost feedstock sourced from this region that will provide a long term strategic supply of biomass to the plant.

I think that they have been very astute to use this feedstock as it’s so abundant and cheap in the US that they have no scale up restrictions and my assessment of their competition is that their feedstocks are not scalable, very supply demand price sensitive and much is imported into the US market where there is likely to be a clamp down on these imports in the future. Velocys is cleverly tapping into a supply chain that has been badly affected over recent decades as the pulp industry went into decline and they will be rejuvenating this wood cutting industry creating hundreds of jobs in badly affected states in US – there will be real political support and focus to their benefit.

2.
So to build a 1400 bpd plant costs about $100/b and to manufacture about
$40/b.. I looked back at my notes from existing AGM's and conversations had
with management over the last few years. If this is currently correct and
this is an assumption (Quite close I think)

Value of Bio Diesel $£70/b currently (NYMEX quoted) is I have been told a good approximation for renewable diesel.
US RIN (D7) Federal Credit (under the Renewable Fuel Standard) $200/b currently
California Low Carbon Fuel Standard (LCFS) state credit $30/b currently

(From what I can see, its worth noting that these credits are all published and are increasing in value over time. The federal and state governments know that they need to incentivize this sector for decades to come and that’s why US laws are currently in place and will continue to be in place underpinning this market to support Velocys and others to get the investment they need to build many plants)
3.

So Total revenues in round numbers $300/b offset cost of development and building/manufacturing finished product say $140/b leaves a surplus of say $160/b. Multiply that by a 1400 bpd plant x 365 days = profit per plant per year of $81,760,000- so nearly $82 Million per year!!! for just one plant.

4.

Velocys completed phase 1 of the USDA program and invited to complete phase two which covers the successful integrated demonstration of its FT technology with TRI’s gasification technology at pilot plant scale later this year and is a
demonstration and proof of offtake and supply etc agreements together with
the backing of a major Bank- Sumitomo Mitsui Banking Corporation (SMBC), is
the lender of record. This is a huge coup for Velocys as these guys are one
of the biggest on the globe for this sort of venture.
They do not get out of bed unless the see huge potential going forward and the number above suggests just that.

It’s clear that these kinds of partners see the Velocys route to market as the most exciting prospect to building a large number of these plants. If they get it right, which I think they will do, this could be the next “cookie cutter” plant build program to revolutionize the renewable fuels (diesel and jet) market in the US and maybe other markets around the world.

FID could be just a formality and is expected in 2018. We have done everything right and I heard from a contact in California Govt that Velocys's name is known in Washington and they are also a member of ABFA and clearly on top and follow the regulatory side closely and are in very good company.

If one plant can generate this sort of return then think where we will be with 5 or 10 plants.. running year after year which I hear is very realistic, in my view, in the next 5-10 years when this takes off!. My reckoning payback could be
as little as 5 years and maybe a lot less as the company implements its plan to reduce costs of the plant design and construction (modularization with Morimatsu) with its strategic technology partners which is we are told a key part of their strategy!

I have been contacting a number of my sources in the industry and it sounds like several of the major Oil companies are also interested in Velocys. Not to buy but work with. It would not surprise me to see BP and Shell having more to do with our company as time passes on as they are both active in this market and have been vocal on their renewed focus for de-carbonization programs where renewable fuels has a big role to play. These big companies with massive crude assets know the transition to a low carbon future will take many decades and it’s not going to be just about electric cars as in the current press!

This sector in the renewable Fuel market is huge as the current US market alone today is +150 billion gallons per year of diesel and jet and it looks like Velocys have identified a number of sites that a 1400bpd could be replicated with feedstock for decades ahead.

5.

We know from previous, that Ervington is a huge supporter and shareholder and maybe this potential UK GTL plant, earlier news released, will become a reality- more than one contact thinks so. If British Airways is not involved I am a Dutchman...no
offence to my friends in Holland.

6.

The share price is not exciting at the moment but the potential is absolutely enormous and when what I believe to be true is confirmed, we will see a multiple rise.

I hope you find this helpful in understanding Velocys potential ...I do feel there are exciting times ahead....

[gac141] 29/8/2017 11:27

In Times yesterday....
The Department for Transport (DfT) said that £22 million would be spent on developing low-carbon “waste-based” fuels for aircraft and lorries in response to growing concern about poor air quality and environmental damage.....

Trials of sustainable jet fuel made from waste materials have been performed in Europe and North America. About 70 groups have expressed interest in bidding for the DfT funding to develop similar proposals in the UK, involving the use of landfill rubbish.

The DfT said the new fuels were “chemically very similar to conventional fuels” and could be used in existing aircraft without engine modifications.

Jesse Norman, of the DfT, said: “We are committed to cutting carbon emissions and promoting new environmentally-friendly fuels that will help us meet that goal.

“We are making funding available to innovative businesses which will lead the way in developing alternative fuels that are efficient, sustainable and clean.

As said before we are keep a presence in the UK.

[gac141] 29/8/2017 10:32

Pleased to hear from David that all staff are safe in Houston and pushing on with projects.

[gac141] 28/8/2017 18:27

I would keep an eye on UK developments. They have not kept a presence here for no reason.

[fluky] 28/8/2017 15:40

EJ: I don't see the strengthening of the board.
Andrew Morris has indeed quite some experience in the power and renewable energy, energy from waste and biofuels sectors but I could not find breakthrough successes in any of his endeavours.

[woolybanana] 28/8/2017 11:52

The Guardian is carrying an article today that might be of some interest to Velocys; they are offering £22 million towards research into development of biofuels from waste.One hope the company is not too fixated with the US project to miss this opportunity.
It seems a pity that BP has invested in a US company to develop same when Velocys is up and waxing.

[thurgarton1] 25/8/2017 17:39

Thanks for that EJ. I'm already retired and my ISAs are self managed and just a way of avoiding tax on dividends etc. I can afford to be speculative and already have a sizeable VLS holding spread over several accounts. Currently I'm down circa 50% on my VLS investment but still well ahead on my overall portfolio and not in need of the funds - I guess I'm lucky having held Ffyfes and ARM at the right time and I'm minded to sit tight on VLS pending a hoped for positive announcement from our far too reticent Board of Directors.

[cocker] 25/8/2017 13:58

We would all be millionaire's if we knew the answer to those sort of questions. I guess the secret of shrewd investment in these sort of tiddlers, is to only invest what you can afford to lose & yet don't forget to take profits, if any along the way. One only has to look at the chart over the last 12 months here to see exactly what I mean.

[thurgarton1] 25/8/2017 13:36

Next question, Do you wait until it hits circa 25p and then fill your boots in the view that you will bring your average holding price down in the expectation that things can only get better, or do you cut your losses and run now?

The Company have to be aware of what is happening yet still the silence is deafening. Even gac141 seems to have little to add. I've got quite a lot of ISA funds available, but am wondering if I have the nerve to go with my instinct having already done the same thing with Lloyds. Any thoughts?