Monday 3rd November 2008
Acquisition of US-based Velocys, Inc.
Leading Clean Fuels Technology Company Created
Oxford Catalysts Group PLC, the leading catalyst innovator for clean fuels, is pleased to announce the acquisition of Velocys, Inc. (“Velocys”), from Battelle Memorial Institute (“Battelle”) − the world’s leading independent science and technology organisation that conducts some $4 billion in annual R&D.
Velocys is the recognised world leader in the design and development of microchannel process technology for the production of synthetic fuels, having had more than $160 million invested in its technology to date, primarily by industrial partners including Dow Chemical, Toyo Engineering and MODEC.
Oxford Catalysts has a platform catalyst technology that provides the increased activity required to unlock the benefits of such microchannel reactors. The companies have been collaborating since May 2007, and together the technologies are capable of producing next generation clean synthetic fuels more economically at smaller scales from captured flare gas, gas that is currently reinjected, stranded gas reserves and biomass, using a novel microchannel Fischer-Tropsch process.
By combining their efforts, the companies will accelerate their time to market and reduce the risk and cost of commercialisation, to quickly become established as a leading player in the fast growth clean fuels market. The combined technologies result in substantial capital cost savings, improved product yields, and greater energy efficiencies than conventional technologies. At a time of high energy and chemical feedstock prices, and increased environmental awareness, the need for these benefits has never been greater.
Roy Lipski, Chief Executive of Oxford Catalysts said:
"“This is a transformational event for both companies and marks the beginning of an exciting new phase in the development of both Oxford Catalysts and Velocys. The enlarged group has the core technology and critical mass required to become a leader in the fast emerging small scale synthetic fuels market − a potentially significant new industry that could unlock sufficient supplies to produce hundreds of billions of dollars’ worth of transportation fuels each year. "
Martin Inglis, Executive Vice President and Chief Financial Officer of Battelle said:
“The group formed by combining these two innovative technology companies is well positioned to become an early commercial winner in the drive for cleaner and more accessible fuels. The combined business will benefit greatly from the increased funding made available through this placing, facilitating the acceleration of key programmes and leading to early commercialisation. We are delighted to be significant shareholders in this exciting venture which brings together technologies originating from two world renowned institutions − the University of Oxford and Battelle.”
Please see the following links for additional information on the proposed acquisition: analyst presentation; video animation of the microchannel technology; white paper on the Velocys FT technology; technical expert’s report on the Velocys technology and its fit with Oxford Catalysts; fuller Regulatory News Service (RNS) announcement; and, AIM re-admission document.
Roy Lipski, CEO / Derek Atkinson, Business Development Director, Oxford Catalysts 01235 841 700
Billy Clegg/Alex Beagley, Financial Dynamics 020 7831 3113
Notes to Editors
Oxford Catalysts Group PLC, the leading catalyst innovator for clean fuels, designs and develops specialty catalysts for the generation of clean fuels from both conventional fossil fuels and certain renewable sources such as bio-waste. Its patented technology is built on almost 20 years of research at the University of Oxford's prestigious Wolfson Catalysis Centre, headed by Professor Malcolm Green, one of the world's most respected inorganic chemists. Oxford Catalysts was founded by Professor Green and Dr Xiao in October 2004.
Oxford Catalysts’ strategy is to license its catalysts for commercial application by entering into co-development partnerships with leading manufacturers, producers and suppliers in the petroleum, petrochemicals, biogas, steam applications and catalysis markets.
Oxford Catalysts has two key platform technologies. The first is for a novel class of catalysts incorporating metal carbides, which can match or exceed the benefits of traditional precious metal catalysts, at a lower cost, for several key processes used in the petroleum and petrochemical industries. Applications of these metal-carbide catalysts include the removal of sulphur from crude oil fractions (known as hydro-desulphurisation or HDS), the conversion of natural gas, coal or bio-mass into virtually sulphur-free liquid fuels via the Fischer-Tropsch reaction (known as the GTL, CTL and BTL processes respectively), and the transformation of biogas (waste methane) into syngas − the building block of liquid fuels.
The second platform relates to a unique chemical reaction which can be used to generate steam at temperatures between 100ºC and 600ºC+, instantaneously, starting from room temperature, using a cheap liquid fuel alongside the Company’s patented catalysts. Such unprecedented Instant Steam could have important applications in a broad range of markets, from cleaning and disinfecting, to green energy in the form of motive power or electricity.
Oxford Catalysts Group PLC is listed on London’s AIM market (coding symbol OCG).
About Velocys
Velocys is changing the way the world produces energy, chemicals and biofuels with revolutionary microchannel technology. Velocys, a subsidiary of Battelle Memorial Institute, was launched in 2001 and owns, or has licences to, the largest microchannel patent portfolio in the world. Velocys is the recognised world leader in the design and development of microchannel process technology for the production of synthetic fuels and commodity chemicals, and has received $160 million of investment from Battelle and industry leading partners, including Dow Chemical, Toyo Engineering and MODEC.
About Battelle
Battelle is the world’s leading independent science and technology organisation that develops technology and manages laboratories for companies and government agencies, including the United States Department of Energy and the Department of Homeland Security. It oversees more than 20,000 staff and conducts approximately $4 billion in annual R&D. Velocys is, as at the date of this announcement, a subsidiary of Battelle.
