Velocys PLC (fka OXFCF)

[tjusa02]

SpeedRead News Letter February 2018

With our fund raise of £18.4 million we have made a strong start to the New Year. Net proceeds will be predominately used to help fund the development of our Mississippi biorefinery, for which we are targeting final investment decision by the middle of 2019. The firm placing was strongly supported by our existing major shareholders – who I would like to thank for their ongoing support – as well as by some significant new shareholders, who we welcome to our shareholder register. We were pleased to include an open offer element as part of the fund raise, which allows all eligible shareholders to participate on the same terms, as set by the market.


In the last few months Velocys has met a number of important milestones. ENVIA’s Oklahoma City plant reached a key operational capacity of 200 barrels per day in October and has since submitted RINs for qualification under the Renewable Fuel Standard. We announced the location of the site of our first biorefinery in the US that will use forestry residues as feedstock. The FEL-2 engineering study for this Mississippi biorefinery has been completed and we have agreed term sheets with several potential offtakers.


We will, no doubt, have many challenges to overcome before we reach FID, but I am confident that we have the team, the technology, the dedication and desire to reach this objective on our journey to build a material position in this attractive market and in turn create significant shareholder value.


Please get in touch if you would like more information on any of the items highlighted in this newsletter.


David Pummell, CEO
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What's new?

Fund raise of approximately £18.4 million

On 15 January 2018 Velocys reported it intended to raise approximately £14 million by way of a firm placing and £4.4 million by way of a placing and open offer. Net proceeds will be used predominantly towards funding initial development costs in respect of the Company's Mississippi biorefinery. It is also expected to include a contribution to progress the next stage of the UK waste-to-jet fuel project as well as to fund the Company’s working capital and central operating costs. Read more… Presentation... Webcast… All resolutions put to shareholders were passed at the General Meeting held on 31 January 2018, and the new ordinary shares were admitted to the market on 1 February.


Site confirmed for first US biorefinery

On 20 October 2017 the Company announced that its first US biorefinery would be located in Natchez, Mississippi. The Company has been offered economic development incentives estimated to be worth up to $60 million to locate at this advantaged site. Velocys is maintaining its list of other attractive sites in the region. Read more…


Oklahoma City plant on track to reach final capacity

ENVIA Energy’s gas-to-liquids plant reached a key operational milestone at the end of October 2017, when it reached a capacity of 200 barrels per day. The Velocys technology being used in Oklahoma City will be deployed in the biorefineries we and our partners are developing, significantly reducing technology risk and improving the likelihood of success at those plants. Read more…


Oklahoma City plant – RIN credit submission

On 16 January 2018 the Company announced that ENVIA believes that fuel produced at its Oklahoma City plant has met the necessary requirements to be submitted for qualification under the Renewable Fuel Standard. Subject to confirmation of the pathway compliance it is expected that all necessary processes to trade the generated D7 RINs for maximum value will be completed in Q1 2018. Read more…


Interim results for the six months ended 30 June 2017

The interim results for 2017 were posted on 29 September 2017. CEO David Pummell commented, “As Velocys the Renewable Fuels Company, we have made considerable progress in our strategy implementation and subsequent restructuring of the business over the first part of the year. Successive operational milestones have been reached at ENVIA Oklahoma and we have made steady progress towards developing our first biorefinery in the US.” Read more…

On the conference circuit

Philipp Stratmann, Vice President, Biofuels, presented at the Advanced Bioeconomy Leadership Conference on Next Generation Technologies (ABLC Next) in San Francisco in October. His talk was reported by Biofuels Digest. Brian Cody, Supply Chain Development Manager, presented at the Gasification and Syngas Technologies Conference in Colorado Springs in the same month.


Looking ahead, David Pummell, CEO will be presenting at the Advanced Bioeconomy Leadership Conference (ABLC) in Washington DC, which starts at the end of February 2018. Neville Hargreaves, Director Capital Projects UK, has been invited to present a talk on the UK waste-to-jet fuel opportunity at World Bio Markets, to be held in Amsterdam, 20-22 March.

In the press

In an Investors Chronicle “Boardroom Talk” podcast, resources writer Alex Newman asked David Pummell why he thinks the tide has turned for Velocys, and what investors can expect in the coming years.


News of the partnership formed including British Airways to address the opportunity for waste to renewable jet fuel plants in the UK continues to be reported, for example in Airport World, Aerospace Technology, Recycling and Waste World and Airport Technology.


The selection of Natchez, Mississippi as the location of the Company’s first US biorefinery using forestry waste as feedstock was covered extensively in the national, trade and biofuels press as well as by the local press in Mississippi – see for example in The Natchez Democrat, Biofuels International and The First Natchez Radio Group.


David Pummell recorded BRR webcasts on both the Natchez site selection and ENVIA Energy’s Oklahoma City plant reaching a capacity of 200 barrels per day. That news was covered by, for example, Alliance News and Sharecast. News of ENVIA’s RIN credit submission as well as the fund raise was reported by, for example, Biomass Magazine.


From a wider industry perspective, Bloomberg Businessweek commented on how forestry practices (such as those that will be used to produce forestry residues that will act as feedstock for Velocys’ Mississippi plant) benefit forestry health, wildfire prevention and a forest’s ability to act as a carbon sink. Elsewhere Shell became one of the latest companies to pledge to decrease greenhouse gas emissions from its activities. Shell’s new climate change target aims to cut the net carbon footprint of its products in half by 2050, and around one-fifth by 2035.

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Link to New Letter: http://www.velocys.com/press/newsletter/speedread25.htm