Oxford Catalysts Group PLC Funding, December 2012

Oxford Catalysts Group PLC
Funding, December 2012

Important Notice
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2

Important Notice (continued)
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November 2012
3

Overview
Oxford Catalysts has unique enabling patented technology for the
production of synthetic fuels via GTL at smaller scales
Huge market opportunity ripe for exploitation
Technology demonstrated in the field and validated via selection for
customer projects
Commercial roll out is beginning
With key partners can supply and support fully integrated GTL plants
Strong team with deep industry knowledge
4

About Us
Unique innovative technology solution for distributed scale GTL*
World-class pedigree − 20 yrs of research and development
– University of Oxford: top global research centre;
largest chemistry department in Western World
– Battelle: world’s largest independent science and
technology organisation
Global leader
– World’s largest and strongest microchannel IP portfolio (~800 patents)
� >7,500 granted GTL patent claims and 6,000 pending; >25,000 total
– $300 million invested, much by commercial partners
Critical mass: ~85 employees
– Catalyst development near Oxford, UK
– Process technology development near Columbus, Ohio, USA
* Target range 1,000-15,000 bpd
5

Board of Directors
Pierre Jungels, PhD, CBE – Chairman
30+ yrs in oil industry: was CEO Enterprise Oil; ED PetroFina; MD British Gas
Dir.: Woodside Petroleum; Baker Hughes; Rockhopper Exploration
Roy Lipski – Chief Executive Officer
Founded, managed, grew and later sold technology business to listed company
Previously at Goldman Sachs
Susan Robertson, FCA – Chief Financial Officer
17 yrs with BOC: was CFO and VP of JAG, the £700m Japanese JV with Air Liquide
Extensive industry experience in commercial, business development & finance roles
Andrew Jamieson, PhD, OBE – Non-executive Director
30+ yrs with Shell: was Executive VP; member of Gas & Power Executive Committee
Leading GTL figure: directed $ multi-billion p.a. spend, including Shell’s Pearl plant in Qatar
Sandy Shaw – Non-executive Director
30+ yrs in oil & gas industry including as Group legal counsel and/or commercial director
Worked for Consort Resources, LASMO, Esso, Marathon and Mobil; founder of Valiant Petroleum
Jan Verloop, PhD – Non-executive Director
30+ yrs with Shell in the Netherlands, UK and Singapore
Was responsible for Shell’s strategic innovation and technology vision
6

The GTL Process
Natural Gas
Reforming
Microchannel reactor
containing super active
catalyst
Syngas
carbon monoxide
+ hydrogen
FT
Syncrude
Synthetic
crude oil
Hydro-processing
Clean synthetic
fuels
diesel, naptha,
jet fuel etc.
7

GTL “Waiting to Happen” in North America
Low Sulfur
Diesel Price
Natural Gas Price
Market conditions
for GTL are at
historically
favourable levels
8

Huge Market Opportunity
Much shale gas is distributed scale / remote. Estimated at as much as
3,300 TCF in North America and over 6,500 TCF worldwide
4.9 TCF of gas flared every year + 6.5 TCF reinjected to avoid flaring alone
Only 5% of the world’s conventional stranded gas fields can
be monetised by large scale GTL / LNG; distributed
scale could unlock up to 50% of remaining fields**
Distributed scale GTL opportunity size**
– Unconventional gas*: 18 million bpd
– Associated gas: 2.7 million bpd
– Stranded conventional gas*: 4.8 million bpd
>25 million bpd
* Assumes monetisation over 100 yrs
* * Based on certain assumptions by the Company
Microchannel
GTL
Conventional
LNG / GTL
4
73
337
347
719
1,043
3,922
>50 (in tcf)
5-50
1-5
gas fields
0.5-1
0.25-0.5
Distribution of conv. gas fields outside US
0.1-0.25

Unique Technology for Modular GTL
Modular
– Suitable for remote locations
– Capacity can be adjusted to field
Lower risk
– Smaller plants = smaller
investments
– Investment can be phased
Reduced costs
– Shop fabricated units
– Modules / plant ‘designed once’
– Possible integration with existing facilities
GTL “for the masses”
– Larger number of suitable fields / opportunities
~1500 bpd FT module
designed by Ventech Engineers
10

Winning Economics
$66/bbl diesel
$4 gas
OCG Enabled
Plant
Ultra-low
Sulfur Diesel
Key Assumptions
Fully integrated facility producing
75% diesel & 25% naphtha
Gas price = $4/MMBTU
9,000 scf per barrel
Capital cost $100k per bpd for
2,500 bpd plant
Operating cost = $15/bbl
20 year plant life
Enables 15% - 20% ROI
(excluding product premium)
11

Complete GTL Solution
Resource
Holders
Field
Services
Technology
Modular
GTL
Catalyst
Suppliers not yet
announced
Engineering
Fabrication
12

Ventech Engineers
Agreements with Ventech Engineers dated 16-Nov-12:
Purchased 933,687 new shares* in Group at £1.35
per share (44% premium to closing mid-market price
on 16-Nov-12), with a lock-in for 6 months
In N America, Oxford Catalysts will be Ventech’s
preferred FT supplier; Ventech will have non-exclusive
access to Group’s FT technology for their customers
(subject to diligence requirements by Ventech)
Ventech is required to order reactors for first
commercial plant by 29-Mar-13 and has indicated that
it is confident it will do so:
– Approx. $8 million revenue to Group is expected,
followed by additional license and catalyst
revenues when reactors transferred to final client
Ventech* has $200 million available to make equity
investments in energy projects and expects to co-invest
in initial customer GTL plants
* Through an affiliate of Ventech, Ventech Project Investments LP
Ventech, headquartered near Houston
Texas, is a global leader in the design
and construction of modular refineries
13

Commercial Process: Example Calumet
Reactor &
Catalyst
Suppliers
License & catalyst
Oxford
Catalysts
Inquiries
* We’re also working with Hatch; Petrofac; Toyo;
and Fluor
Customer
EPC
Fabricators
& Suppliers
Finished plant
*
Other
Technology
Providers
14

Revenue Streams*
Eng. study
6m 3-6m 18-24m
2 yr Every 2 yr
Site study
Order
$4.3m
$3.8m
$6.3m
Construction
Payments
over course of
construction
GTL total installed cost:
~$100,000/bpd
Example: 2,500 bpd plant
Start-up
$4.3m
$3.8m
$6.3m
Catalyst
replacement
* Based on Oxford Catalysts’ standard pricing
$8.5m
$8.5m
15

Sales Pipeline
Active discussions with 40 companies
12 client FEL engineering studies currently underway
Active pipeline of over 75,000 bpd total installed capacity (equiv. 30
medium size plants)
– Many opportunities we expect to be first of multiple future plants
Evidenced by recent announcements
– Rosneft 100 bpd GTL demo (May ‘12)
– Successful operation of full scale commercial reactor (started May ‘12)
– GreenSky London commercial BTL plant (July '12)
– California Energy Commission funded BTL demo (July ‘12)
– Calumet 1,000 bpd GTL projects (September ‘12)
16

Commercial Selection for GreenSky Projects
Selected by Solena Fuels as sole FT supplier for series of
commercial BTL plants
Competitive selection process based on technology evaluation
advised by Fluor
One of first known competitive solicitation of an FT process for
series of distributed plants in the industry
First plant – GreenSky London, in partnership with British Airways
Further projects planned by Solena with other major airlines
and shipping companies, including Lufthansa
17

GreenSky London
Aiming to be Europe’s first waste to aviation fuel project
Enough fuel to supply BA’s needs for London City Airport
– BA Chairman and CEO on record
discussing the project
Recent updates
– BA offtake for jet fuel for 10 years (at
market rates) – worth $500m at
current prices
– A Competitive Letter of Interest has
been obtained from an export credit
agency to provide financing,
including associated term funding
– Site identified and under option; consent work has begun
– Pre-front end engineering and design work for the plant has started
Target completion in 2015; requires ‘decision to proceed’ in 2013
18

Selection By Calumet Specialty Products
Selected to supply FT technology for 1,000 bpd commercial GTL plant
Calumet is a public company listed on NASDAQ: CLMT
– Revenue: $4.1bn; >20% pa 5yr revenue growth
– Produces over 1,500 specialty products
– Operates 8 facilities with total throughput of
135,000 bpd
Calumet has sufficient capital / access to capital for the project
Design to be complete end 2012 / early 2013
Final ‘decision to proceed’ expected in 2013 H1
19

Calumet – Karns City, PA
In the heart of the Marcellus Shale Field
Karns City, PA
20

Summary
The time has come for smaller scale GTL
– Gas arbitrage, shale gas reserves, flare gas, stranded gas, remote
locations, energy security, cleaner fuels legislation
Huge market opportunity
– 25 million bpd* of synthetic fuel could be made by distributed scale GTL
Oxford Catalysts: leader in advanced smaller scale GTL technology
– 15 years and $300 million invested in its unique innovative technology
– Exhaustive global patent protection (>7,500 granted GTL claims)
– First class partners
Commercial roll out underway
– Rosneft, GreenSky/BA, Sierra Energy, Calumet
– Ready for further orders
* Based on certain assumptions by the Company
21

Use of Funds & Placing Details
Cash Placing
Up to £30 million
Expected Use of Funds
Recruit additional resources to support expanding commercial activities
Increase level and reach of marketing activities
Scale up supply chain and customer support capabilities
Strengthen balance sheet for added customer comfort
Anticipated Timetable
Pricing and placing arrangements w/c 3 December 2012
Announcement w/c 3/10 December 2012
General Meeting 3 January 2013
Settlement and dealing date 4 January 2013
22

Appendices
23

Balance Sheet & Large Shareholders
£m 30 June 2012 31 December 2011
Non-current assets 28.1 28.4
Current assets 14.6 19.4
Cash, short-term investments and financial assets 12.1 17.1
Current liabilities 3.4 3.7
Non-current liabilities 1.4 1.5
Borrowings 1.2 1.3
Net assets 37.9 42.7
Institution Shareholding
Lansdowne Partners 19.3%
Henderson Global Investors 14.5%
Battelle Memorial Institute 11.4%
Ruffer 8.6%
Directors and individual founder 6.5% Including founder Prof. Green
IP2IPO 5.2% Seed capital investor
University of Oxford 2.6% Founder of Oxford Catalysts
24

Key Personnel
Paul Schubert, Chief Operating Officer
30 years in petrochemical and natural gas industries; 11 years in GTL
Experience with Phillips Petroleum, Engelhard, Syntroleum and Catalytica
Laura Silva, Intellectual Property, Legal & Licensing Director
Founding member of Velocys; managed microchannel IP strategy for over 17 years
Led acquisition and in-licensing of the Group’s large, pioneering patent portfolio
Matt Davis, Vice President of Manufacturing
Supply chain efficiency expert; business unit manager of multiple manufacturing
operations that generated $188 million in annual revenue
Experience with Parker-Hannifin, Honda and Arthur Andersen
Steve LeViness, Fischer-Tropsch Product Manager
Internationally recognized expert in GTL technologies, with over 25 years experience
Formerly with Exxon, Mobil, Syntroleum and Schlumberger
Paul Schubert
25

Key Personnel (cont.)
Jeff McDaniel, Commercial Director
Founding member of Velocys management team; instrumental in securing
over $300 million invested in OCG technology
Formerly with GE and Battelle
Ken Roberts, Sr. Business Development Director
Over 35 years of international petrochemical business development,
including senior roles with GTL/XTL firms
Experience with Syntroleum, Australian-American Energy, Oman Oil,
Atlantic-Richfield (ARCO)
Neville Hargreaves, Business Development Director
Over 20 years experience as a strategist and partnership builder with a
special focus on energy industries
Formerly with Esso, Bain & Co. and several entrepreneurial ventures
Jeff McDaniel
26

Intellectual Property – Our Strategic Asset
World’s largest microchannel patent portfolio
– >25,000 claims in >800 patents
– Momentum continues: 67 patents granted
in the past 12 months
– Important patents granted covering a variety
of technologies
High quality
– Patents opposed more frequently than
average
– Group IP cited over 3,000 times in others’
patents, including patents from: Air
Liquide; Air Products; Chevron; Conoco
Phillips; Exxon Mobil; Linde; Marathon;
Praxair; Shell; Texaco; Total/Fina; Udhe; UOP
IP portfolio has years to run – it’s continually being renewed and extended
27

Industry is Recognising Us
Kirkpatrick Chemical Engineering Achievement Award (2011)
– Most noteworthy technology commercialized anywhere in the world
– Only small company to win award since its inception in 1933
Rushlight Fossil Fuel’s Award and Energy Environment Award (2011)
– Recognises leading energy, resource and environmental technologies/ innovations
Institution of Chemical Engineers’ Innovative Product Award (2010)
– Recognises the best product from the process industries
ChemInnovations’ Award (2010)
– Organised by Chemical Engineering magazine
Chemical Industries Association’s Innovation Award (2010)
– 6 finalists including: Johnson Matthey; Eli Lilly; Huntsman
World XTL Award (2010)
– Finalists included: ENI / IFP / Axens; Oryx GTL; Shell; Technip
Energy Institute’s Innovation Award (2009)
– 6 finalists including Shell UK; presented by Exxon Mobil
ICIS’ Innovation Award; SME(2009)
– Sponsored by Dow Corning; 13 finalists
US National Academy of Sciences’ highest ranking (2009)
– For Velocys’ successful $5 million hydro-processing grant proposal
TechColumbus’ Green Innovation Award (2008)
R&D 100’s Award (2008)
– Known as the “Oscars of Innovation”
28

GTL Today = Massive Scale
Shell’s Pearl GTL in Qatar
– ~$19bn price tag
– 140,000 bpd + 120,000 bpd of NGL
Sasol Oryx also in Qatar
– $1bn for 34,000 bpd
– 60m tall, 2,000 tonne reactors
Chevron Escravos GTL in Nigeria
– $8.4bn and counting
– 33,000 bpd, using Sasol technology
ExxonMobil: Methanol to Gasoline
– New Plymouth, New Zealand (‘85-’95)
– 14,500 bpd
Limited to few locations / opportunities
29

Microchannel Process Technology
Conventional
~ 25-150 mm
Characteristic
dimension
Microchannel
Enhanced
mass & heat
transfer
~ 0.1-
10 mm
30

Outperforming Conventional Systems
Microchannels:
Control reactions at
optimal conditions
Accelerate chemical
processes by 10-1,000
fold
Allow use of novel,
much more active
catalysts
Enable smaller, more
productive reactors
31

$k/bpd capacity
Numbering Up vs. Scaling Up
Cost advantage
Conventional slurry reactor
OCG microchannel reactor
OCG microchannels − cost range
0 2000 4000 6000 8000 10000 12000 14000
2,000 6,000 10,000 15,000
Plant capacity (bpd)
Microchannel FT Reactor reactor
Oxford Catalysts
Conventional FT Reactor
E.g. Sasol
Modular microchannels – large scale economics at smaller scales
32

Superactive FT Catalyst
Catalyst Productivity
(kg/m 3 /hr)
1600
1400
1200
1000
800
600
400
200
0
Fixed Bed Slurry Bed OCG
(Shell) (Sasol)
33

FT Technology Demonstrated in the Field
Existing facility with FT
capabilities
25 bpd commercial-scale
reactor started in May 2012.
Now complete
Met performance criteria
Results supporting design
of 5,000 bpd commercial
facility
Showcase for customer
visits
Velocys
FT
34

SMR Demonstration
Hosted by Petrobras at facility in
Fortaleza, Brazil
Full cost covered by Toyo
Engineering & MODEC
6 bpd demonstration mimics
complete FPSO mounted GTL
facility
First milestone payment
received
Targeting qualification 2013 H2
Requirement only for offshore
GTL market
35

Catalyst Stability & Selectivity
Reached over 650
days without
regeneration*
* Laboratory data as shown
Reactor
upset
Dilute gas
and short
contact
time
Very low
deactivation
36

Modular Reactor Design
25 bpd single-core reactor
5 Sold
Single-core reactor
Multi-core reactors
25 bpd
150 bpd
500 bpd
37

OCG Reactor Designed for Serviceability
Manways size and
location designed
with Mourik for
optimum access for
catalyst handling
Bottom manways
have elliptical heads
to allow liquid phase
product draining.
Removable for
catalyst change-out
Diameter ~4’ (1.45m)
Length ~13’ (4.73m)
Reactor size
optimised for
weight/crane limits
Weld locations
optimised for
mass
manufacturing
38

Integrated Modular GTL Facility Design
Designed by Ventech Engineers
39