Proactive Investors - Run By Investors For Investors

Q&A: Velocys believes CIS deal will be a door-opener

Velocys, formerly Oxford Catalysts, owns technology that powers small scale gas to liquids plants. It recently announced a commercial deal to sell a reactor to an unnamed customer in the Commonwealth of Independent States (CIS).
Q&A: Velocys believes CIS deal will be a door-opener

Velocys (LON:VLS), formerly Oxford Catalysts, owns technology that powers small scale gas to liquids plants. It recently announced a commercial deal to sell a reactor to an unnamed customer in the Commonwealth of Independent States (CIS). 
Proactive Investors (PI) recently spoke to Dr Neville Hargreaves, the company’s Business Development director.

PI: First, how significant is this latest deal?

Hargreaves: I think its significance lies in the enormous potential of the market in Russia and the other CIS countries, for gas to liquids. There's an enormous amount of stranded gas there. There's also a significant flaring problem in many parts of the region. So, we've always felt that that market was pretty important to us, and it's great to get a real sale into it.

PI: But this, itself, is actually quite small, isn't it? Because I think revenue is - what - just US$2mln a year. Is that right?

Hargreaves: That's the right order of magnitude, yes. So, it's a starting point, really. It's pretty small in terms of the commercial plants we expect to be selling in the future. It's only a single reactor, but although, obviously, we welcome the revenue, the greatest significance, I think, is that we're recognised as having the solution to some of the big problems in that industry, in that market.

PI: Well, let's take a look at this, because as you say, you've got this technology to build what many regard as relatively low cost plants, to generate synthetic liquids from natural gas, which is widely expected to be a big turning point for investors, as you just alluded to. How far away are you from this significant point?

Hargreaves: Well, it's always a hard question to answer, which is why I'm smiling, but I really do think we're very close. We have a number of projects that have gone through a significant amount of engineering, due diligence, understanding project development, and it's the final investment decision. You only know when you've got there, but I do think that getting what we call a full commercial multi-reactor plant will happen soon.

PI: So, 2014 could, potentially, be very exciting for investors. Just outline the strategy.

Hargreaves: I think, really, we need just to keep doing what we're doing. We're very confident that smaller scale gas to liquids will happen soon in North America, in the CIS, and elsewhere. It's just a question of exactly when those points of inflection occur. So, I think we carry on working with those customers we're working with. We're attracting new people in all the time, and make sure we're there to deliver when we're required.

View full VLS profile View Profile

Velocys Timeline

Related Articles

power lines
March 13 2018
"We continue to pursue our strategy of asset maximisation and delivering responsible growth. In the last quarter we have established a new record for our operational performance," said Arvind Gupta
offshore oil rig
May 08 2018
Life has been tough in the oil sector in recent years, but things started to pick up towards the end of 2017
oil and gas operations
January 24 2018
“The increase in production levels is due to successful work-overs and the implementation of production optimisation programs,” Cadogan said

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use