Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
It's because they wanted to file addendums to exhibits past the last date which they normally accept changes. So they had to request the chair accept the late changes for 'good cause' (i.e. must have provided a good enough reason). So it's just a procedural thing.
Is cup and handle a cricket thing?
Not really sure what else people can say that isn't pure tasseography.
As folk have outlined: QFI have had plenty of positive progress lately, yet the share price did not respond because of heavy selling from multiple IIs into limited liquidity.
SP appears to have corrected to a degree now that Miton and Canaccord are no longer major holders.
The following is a nicely written article from Vertoro's Dr Michael Boot on MSAR + Vertoro's lignin-derived crude sugar oil (CSO). It gives a little more technical insight into how the integration works.
I've reposted it on Twitter to hopefully give it a bit of amplification, so please do share it around:
https://twitter.com/quorumzine/status/1582309191536250880
Also on LinkedIn:
https://www.linkedin.com/posts/innovation-news-network_vertoro-plan-to-decarbonise-the-shipping-activity-6988068682136485888-DFYK
Is something strange going on with the LSE forums today? A bunch of posts people made this morning seem to have disappeared. Maybe they are having technical issues again.
I agree Fitzy66, I think QFI are looking better now than at any point since Maersk and KSA. Arguably better from a business development perspective, as our partners seem to be more reliable and the economic and regulatory conditions are better aligned with the benefits of our product offerings (noting that we have 2 product categories now instead of 1).
Clearly, still some questions of funding requirements for 2024 onwards as mentioned in the update, but if QFI keep executing as we've seen in this latest update, then that should open up more preferential forms of financing (e.g. project financing, merchant financing, less dilutive raises, strategic investments, etc).
I also hope that once our Moroccan client uncloaks themselves, their significant name and reputation will lend credibility to our products in the industrial sector. It's a big opportunity that is also quite simple and modular (industrial heat, lots of modest sized rotary calcinators and similar).
Risk as always, but I'm personally continuing to feel positive about QFI (unsurprising, given that's been my position for a decade+ now, but I'm sure you know what I mean).
I agree with dtwin and others that it was a muck-up.
Chip shortages, especially of control circuitry, have been known about since early 2020. I work in IT industry and could have told them that was likely to be an issue.
You say QFI took the word of supplier and so it's not their fault: one of the key tasks of a project manager is to mitigate supplier risk should a supplier not be able to meet their commitments. You plan for *precisely* these kinds of contingencies.
There *are* lessons to be learned from this in the area of project management and risk mitigation; they've said that themselves. Not executing everything perfectly is only human, and I'm glad they acknowledge it; you learn a lot when things go wrong and you analytical about it. If you just say "it was unavoidable" to everything then you are doomed for those issues to recur in future.
They had 2 full-sized MMUs in storage and a research MMU at QRF. Between all of those key MSAR production assets they were not able to produce 60t of fuel in a timely manner which delayed a key trial.
Frankly, I don't quite understand the "goldilocks MMU" explanation, where one MMU is too small, the others are too big. We've produced volumes in the same order of magnitude several times before. But, even if you accept that argument in its entirety, the main thrust of the point is the same: you must plan for these contingencies as a key project risk and bottleneck.
It is *not* about putting blame on individuals; blame culture does not help. It's about honest post-mortem analysis, identifying the fault , and improving processes for future. So, it doesn't need to be understood as a negative that spawns defensive responses.
A problem for larger holders like Miton is that they had a lot of shares to shift in a smallcap stock that tends to have low volume, so that readily pushes the SP down.
So, as far as possible, they wait for events that generate sufficient liquidity (e.g. positive recent results and business update) and sell a bunch. As we saw, that still holds down the SP -- people expected an immediate SP increase from an update that seemed very positive, but it's a case of "least bad option" for these IIs.
And it doesn't help when multiple large holders are exiting at the same time because they are trying to honour redemptions by their punters and maintaining various mandatory balance and liquidity requirements.
Contrastingly, one of the few advantages that retail shareholders enjoy is that we can be patient and wait for conditions to change if we feel there's not a fundamental issue causing the SP depression.
So, at least for my part, I continue to wait (im)patiently.
Read the IMC Q&A and audio section, there's an in-depth explanation
Big Sky are required to use Valkor as their preferred contractor. Refer to the Petroteq RNS about the Big Sky license deal for more on that.
I would suggest that is a longer term opportunity for the reasons previously outlined, but also including extensive construction times.
The reference you point to does sound like MSAR. Steve obviously has expressed his desire to use MSAR via several of his companies. Whether that transpires or not, we shall see, but it's certainly not a bad sign.
There are several different projects that Steve Byle is involved in.
Valkor, via Greenfield and Heavy Sweet Oil, are first undertaking a (fairly) conventional heavy oil drilling campaign in Utah. You can see their field plans online via Utah DOGM and various presentations they have given on YouTube (search back to find the links, or consult the forums).
Longer term, Greenfield, HSO, and Big Sky have all expressed have their intention to get into surface oil sands play. However, a full sands processing plant requires a lot more CAPEX and time to get rolling than the downhole/in-situ opportunity. They can both be run from the same acreages.
Without commenting on any specifics on what SP is attainable, etc, I'd just point out that the level of development and of the business pipeline is significantly better now than it was at share prices multiples of today.
Nothing guaranteed with QFI, especially not their timelines, but I've been happy with the level of progress.
In general, the ability to access client sites has improved dramatically (re: covid), and there's also been a slow easing of shortages of microchips and shipping capacity. Things are still far from ideal, but hopefully there will be fewer external headwinds affecting QFI's ability to execute key trials and commercial agreements.
Concurrently, the pressure to improve environmental performance in marine is increasing as everyone anticipates IMO, EU, and US-related regulations on key pollutants, including CO2, PMx, and black soot. These are areas where MSAR and bioMSAR are particularly strong, due to their uplift in efficiency and improved burnout (plus, for bioMSAR, low-carbon feedstocks).
This is all coinciding with a sharp increases in both absolute oil prices and the spreads between distillate and high sulphur heavy fuels - so, everyone can see the economic case is compelling presently.
I just hope QFI move fast enough to provide MSAR/bioMSAR solutions to customers when they need it the most (i.e. ASAP).
As various people have pointed out, there are some key events coming this quarter or soon after that should give us a firmer understanding of timelines and trajectory: fuel supply for MSC trials (which typically can transition to commercial supply fairly easily); Morocco completing trials and commercial negotiations; Utah drilling campaign and trials, etc. Some of these could end up being synergistic, depending on the timing and details, so that's something to look forward to.
Big Sky were mentioned by Jason during the recent IMC presentation (timestamp approx 8m40s).
PetroJam in Jamaica seems another possibility. It's 50,000 bopd, so whether that qualifies as 'pretty large' is up for debate.
Hi everyone.
The full IMC recording is out now. I have release an audio-only version that I've processed with various Izotope Audio Tools to reduce the horribly annoying laptop button clicks that made it hard to hear.
I've tried my best and it's not perfect, but greatly improved I think.
Enjoy!
https://quorumzine.gitlab.io/quorum/content/2022/10/04/improved-audio-company-meeting.html
Yes, they also want to compare the performance of MSAR vs bioMSAR fuels to verify their financial, technical, and environmental benefits. The best way to do that is by having an identical technical setup to eliminate as many variables as possible.
One way is to run the trials consecutively and be very patient, as you naturally get the same setup. The other way is to run trials in parallel on vessels that are as near a clone of each other as possible. Of course, in reality they will be on slightly different routes and all that, but over the course of the trial the analysts should be able to figure it out. Less uncertainty in the data is always better.
As others have pointed out, Jason said they'll want to get the bioMSAR trial underway first and I'm sure if all is well, then they'll look at rolling in the MSAR trial vessel. It would be nice for us to have 2 vessels running and get a bit of revenue, potentially...
You are correct Jason didn't say it was Bremerhaven explicitly, I should have been clearer.
Here's why I think it's a dead cert that is what he's referring to: Bremerhaven is Leandra's sister ship, and was purchased by MSC at the same time as Leandra. She is identical, with the exception of the enhanced fuel booster system. She has the same Flex engine that MSAR has been tested on previously, and would obviously be a good vey A/B test if you are trying to compare two fuels.
Few more points occurred to me.
- Emulsifying HFO is considered a reasonable option for POCs to prove the technology works, also perhaps bitumen terminals.
- No refiner has been decided for MSC, but they prefer somewhere like Netherlands as there is better tax recognition for biofuels.
- Cepsa still on the cards for Morocco and MSC in longer term as it's "ideally placed" in med for bunkering.
- They are aware of SB's various side projects like Green Flame and similar, but it is not something they are focussing on right now. They think the Utah stuff is further progressed and they are pushing in that direction. I think this is a "don't get distracted" thing... Noted.
- Utah did not get clear answers on whether any consumers are lined up or whether it's just aspirational still. JM did comment that there are a few local consumers they could supply to but the main goal is now marine market (it's very low sulphur). Still sounds a bit woolly on the Valkor side, tbh. Let's see
- Aquafuel second round of testing and optimisation for bioMSAR was delayed as Aquafuel were unable to get the parts they needed. They have just arrived, so that testing has commenced already. Hopefully people can stop fretting about that now.
If anyone else has further notes, that would be appreciated.
Notes off the top of my head
- Jason is in Singapore to attend a major bunkering conference to try to speak to various potential clients, suppliers, etc (sibcon)
- AM confirmed that his intent with the M&A section was that Quadrise might have the opportunity to make small acquisitions that complement their technology/business, but currently financial resources are the limitation. He didn't mean they are actively trying to flog the company
- JM said QFI have had very promising conversations with Wartsila that indicate, depending on results of trial, they could get a fairly broad engine approval for MSAR LONO - so no need for separate LONOs for model years, cylinder count, stroke length, etc. That would obviously be a massive win if it transpires
- JM finally admitted there's the potential for MSC Bremerhaven to run MSAR while the bioMSAR trial is underway. Presumably it depends on how well that first trial is going. He's completely swerved answering that question before, so something has changed on this topic (positively). I always maintained that it was surely too much of a coincidence that MSC bought Leandra's sister ship for them not to at least have the intent to do something MSAR-related with it (in addition to obviously being great for their usual cargo shipping business needs)
- JM won't disclose when Leandra is going into dry dock as that is "sensitive" for some reason ??. Bit ridiculous, but OK
- Morocco burn should be happening pretty soon, fuel is on the way. Problems with microchip shortages meant their trial MMU could not be commissioned. Did not really explain why they couldn't use one of the other MMUs instead of delaying the trials for a quarter! bioMSAR will be manufactured shortly and sent over as they are testing both
- Morocco client is very keen to go ahead, and there are proposals to do a third trial at a site that is very similar to Site B. I hope we aren't seeing any major QFI Mission Creep here as expanding scope has been a cause of delay in the past! Let's get the basics over the line
- Click, click, click. Yes, it was me who complained about that and Andy brought it up. Thank goodness, JM then put in an external mouse
- Americas sounds interesting, but still early enough stage that I don't think we should be paying too much attention yet. Unless someone else got a different impression? The refinery use-case looks nice, but we know how slow they tend to be
- Utah progressing as per our sleuthing on DOGM hearings and documents. They still don't have any assays because Valkor have decided to prioritise accelerating the full production schedule at the expense of exploration being a bit later/reduced. Samples they received previously were too contaminated and Valkor have optimised their processes significantly enough that it may no longer be representative. They hope to be going out to site soon to discuss delivering the MMU for trials (presumably the one with trace heating for cold Utah climate)