Quadrise PLC (AIM:QED)’s licence and supply agreement with Valkor has “delighted” analysts at Shore Capital.
“We continue to see huge potential for bioMSAR and MSAR (lower carbon fuels) for marine and industrial usage,” the broker said.
Yesterday, the AIM-listed firm said it signed an agreement to produce and sell its carbon-reducing technology at Valkor’s Utah heavy oil asset.
Quadrise’s MSAR and bioMSAR fuels will be produced and sold from Valkor’s site as part of a US$1.5mln deal, which could produce revenues for the former from August this year.
Quadrise will provide engineering support to Valkor for at least two years, with the US oil firm licensed to sell the modified fuel for 10 years under the deal.
Shore Capital noted that Quadrise’s opportunity in the marine sector following its agreement with shipping giant MSC could be worth a “multiple of Quadrise’s current enterprise in value”.
“MSC currently consumes close to 10mln tonnes of fuel oil annually and we believed Quadrise could charge US$50 per tonne for licensing its technology,” the broker said.
The target price was set at 1.27p.