29th Sep 2014 09:25
LONDON (Alliance News) - Gas to liquids technology company Velocys PLC Monday reported a wider loss for the first half of the year as research and development and administrative costs rose, but Chief Executive Roy Lipski was bullish about the outlook as the first commercial plant using the company's technology is being built.
The company also announced it will raise gross proceeds of about GBP52 million by issuing 23.1 million shares at 225 pence each in an over-subscribed placing. The placing price was a slight premium to its closing share price in Friday. It will use the money to strengthen its balance sheet, for project development, and for working capital.
"2014 is shaping up to be the best year yet in the history of Velocys. With the first commercial GTL plant using the company's technology under construction, Velocys has firmly established itself as global leader in smaller scale GTL. Market conditions remain favourable and the pipeline of opportunities is healthy," Lipski said in the earnings statement.
Velocys reported a net loss of GBP10.1 million for the six months to end-June, wider than the GBP7.1 million loss it reported a year earlier, as unfunded R&D costs rose to GBP5.6 million, from GBP4.7 million, and administrative costs rose by GBP1.3 million. It currently doesn't earn much in the way of revenue.
The first gas to liquids plant being built using the company's technology is in Oklahoma in the US. It had announced a joint venture in March with Waste Management, NRG and Ventech to develop gas-to-liquids plants using a combination of renewable biogas, including landfill gas, and natural gas.
The venture has started buying major equipment for the first plant, and construction and commissioning is expected to be completed in the second quarter of 2016.
"Velocys believes that the development of a first commercial plant in Oklahoma will have a positive impact on its sales pipeline. Engineering studies, which form the first stage of plant development, are progressing with a number of customers, and in many cases concern the first of several potential sites," it said.
Velocys shares were up 0.4% at 224.95 pence Monday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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