03 Sep | Oxford Catalysts (Velocys PLC)
Oxford Catalysts (OCG) are an interesting proposition that we’ve tucked away in our portfolio as a company with the potential to do some very big things in the next decade. They’re a classic long-term speculative play, with some revolutionary intellectual property, in what could prove to be a very lucrative market.
They’re in the Gas to Liquid (GTL) field; a pretty descriptive name for an awfully technical topic.
This from their 2012 Annual Report:
Oxford Catalysts enables Gas-to-Liquids (GTL) plants to convert unconventional, remote and problem gas into valuable liquid fuels. Systems based on the Group’s technology (marketed under the brand name Velocys) are significantly smaller than those using conventional technology, enabling modular plants that can be deployed cost effectively in remote locations and on smaller fields than is possible with competing systems. Together with world-class partners, Oxford Catalysts provides complete smaller scale modular GTL solutions that address an untapped market of up to 25 million barrels of fuel a day.
In layman’s terms – and I’m certainly a layman in the world of liquified natural gas – it’s a scalable process that takes place on the gas fields, whereby low-value natural gas is collected and liquified for shipping before being turned back into high-value diesel or jet fuel at its destination.
Oxford Catalysts is one of two companies worldwide that have been able to manufacture small scale gas-to-liquid reactors placing them in an enviable position to take advantage of a market that is potentially worth billions of dollars.
2012 also saw Oxford Catalysts selected for two commercial projects with potential revenues of over US$160 million (source: Oxford Catalysts Group PLC Annual Report and Accounts 2012 ).
Following a 2012 that saw prices climb from 50 to 180 pence, 2013 has been a little more subdued on the price front trading in a 130 to 160 pence range for the past six months.
Chart courtesy of Share Price.
In January this year, Small Company Share Watch featured Oxford Catalysts and had this to say:
Some idea of the opportunity facing Oxford is given by the fact that Lipski (Roy Lipski, CEO) says he is in talks with 30 customers over plants totaling 75,000 bpd and four sets of discussions are described as “advanced”.
Some food for thought.
Interims are due later this month – 23rd September – which often sees a little spike in interest, if not always in price.
And when Oxford Catalysts becomes Velocys plc on 25th September 2013, here’s hoping there’s a little good news hot on the heels of that name change. It’s happened before.
Thanks again for dropping by.