Velocys PLC AGM Statement (8148I)
22 June 2017 - 4:00PM
UK Regulatory
TIDMVLS
RNS Number : 8148I
Velocys PLC
22 June 2017
News release
Velocys plc
("Velocys" or "the Company")
22 June 2017
Annual general meeting (AGM) statement
Velocys plc (VLS.L), the company at the forefront of smaller
scale gas-to-liquids (GTL), is hosting its AGM today at 10.45am. At
the AGM, David Pummell, CEO will make the following comments:
"2016 was a busy year of change for Velocys. We invested
significant effort into the commissioning and start-up of ENVIA
Oklahoma, we identified our new growth strategy and have made
considerable progress with its implementation. Internally we have
driven greater simplicity and focus on what we do and we believe we
have created the required platform to deliver future shareholder
value.
"Fischer-Tropsch (FT) product is being produced at ENVIA and we
are pleased that the operational data from the FT units meet the
set performance requirements at commercial scale. We are expecting
production of first saleable product shortly and ENVIA will
continue to ramp up production to full capacity over the coming
months.
"Our new strategy is for Velocys to be at the heart of building
plants that convert woody biomass to high specification renewable
diesel and jet fuel for the US market, our primary focus market. We
have a world class, proven technology and highly skilled operations
and engineering teams that, with our partners, will successfully
design, build, commission and start up these commercial plants. Our
route to the production of renewable fuels from woody biomass uses
cost effective, abundant and entirely sustainable feedstock,
allowing our solution to be highly scalable to meet the increased
demand for renewable fuels. All of this contributes to our
differentiated value proposition to the market.
"We believe our business model will enable Velocys, with its
strategic partners, to build a supply leadership position in this
market over the next 10 years, by delivering economically
differentiated, financed, operations ready plants, and do it
reliably again and again.
"The US renewable fuels market is a high value market with
substantial potential for volume growth, now, and for many years to
come. The estimated consumption of renewable diesel in California
in 2016 was around 300 million gallons. By 2030 around 1 billion
gallons of the total diesel supply would need to come from
renewable diesel to meet State obligations. Increasing pressure
from public opinion and legislation to curb greenhouse gas
emissions and reduce pollution drives this market. This has led to
long term structural incentives for renewable fuels in the form of
fuel credits at both federal and state level, greatly enhancing the
revenues from a Velocys plant. Successful delivery of the Velocys
strategy will result in the construction of multiple plants, to
meet this fundamental need to replace fossil fuels.
"There is strong momentum within the business. On the
engineering front we have engaged IHI E&C to carry out the
pre-FEED engineering study for our first biomass-to-liquids (BTL)
plant and this remains on track. We have selected TRI as our
strategic partner for gasification technology and we are now in the
process of selecting other licensed technologies. We recently
announced that the US Department of Agriculture (USDA) has invited
Velocys to participate in Phase 2 of its loan guarantee programme
for up to $200 million of debt for our first BTL plant. Securing
this commitment would financially de-risk plant 1 and create an
attractive platform to secure the required additional equity from
investors. A key requirement for the USDA qualification is the
successful completion of a joint demonstration of our FT technology
combined with TRI's gasification technology; our FT system is now
on site at TRI's facility in North Carolina where the demonstration
will take place. We have engaged the global leading project finance
bank, Sumitomo Mitsui Banking Corporation (SMBC) as the lender of
record and financial advisor. SMBC will lead the syndication of the
debt funding portion in 2018. All these carefully planned
initiatives have the aim of securing project equity funding and
reaching final investment decision during the course of 2018.
"The Company is transforming - moving away from being 'a FT
technology company' to being Velocys, 'the renewable fuels
company'. The time is now right for Velocys to take forward a bold
growth strategy and I am confident that we are the right company,
with the right technology, at the right time to enter this
attractive market and deliver sustainable growth. In five years'
time I want Velocys to be known as the company that delivers
renewable fuels plants to its customers, cost effectively and at
low risk. Much work still needs to be done to successfully deliver
our strategy but we continue to work towards our goal with
confidence and in a focused and professional way."
- Ends -
For further information, please contact:
Velocys
David Pummell, CEO +44 1235 841
Susan Robertson, CFO 700
Numis Securities (Nomad and Broker)
Alex Ham
Stuart Skinner
Jamie Lillywhite +44 20 7260
Tom Ballard 1000
Canaccord Genuity (Joint Broker)
Henry Fitzgerald-O'Connor +44 20 7523
Ben Griffiths 8000
Camarco (financial communications
& PR)
Billy Clegg +44 20 3757
Georgia Edmonds 4983
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
Notes to editors
About Velocys
Velocys is the company at the forefront of smaller scale
gas-to-liquids (GTL), providing the bridge connecting stranded and
low value feedstocks such as natural gas, landfill gas or biomass
with markets for premium products such as renewable diesel, jet
fuel and waxes.
With its partners, Velocys aims to deliver the most economically
compelling conversion solution; a fully integrated offer that can
be deployed at scale into the growing, attractive markets on which
it focuses. Velocys technology, protected by several hundred
patents in over 30 countries, is specifically designed for smaller
scales, combining super-active catalysts with intensified reactor
systems. Standardised modular plants can be deployed readily in a
wide range of locations, and Velocys' capabilities and extensive
experience deliver a proven route to operation.
Velocys plc is admitted to trading on the AIM market of the
London Stock Exchange (LSE: VLS). The Company has a strong,
multi-disciplinary staff operating from its commercial centre in
Houston, Texas, USA and technical facilities near Oxford, UK and
Columbus, Ohio, USA. First product has been produced at its
commercial reference plant, which is located adjacent to Waste
Management's East Oak landfill site in Oklahoma City.
www.velocys.com
This information is provided by RNS
The company news service from the London Stock Exchange
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