Member Info for nastid

Yes, happy may have been the wrong word. Pretty much every year there has been concerns about feestock, so it was more to do with the contrast. Based on the reading from lots of updates, personally, I get the impression that they're pleased with the results from their feedstock supply push.

I'm not expecting, or at least discounting, anything from slickers. Nice if it happens but I'd much rather they concentrated on the US market. If we could swap the previous international plans, to US ones, we'd now be in a much better position.

The sale price was in the middle of my ‘guesstimate’ of $1-2m, not wonderful but the possible extra revenue in royalty payments is welcome. More to the point, once complete, the onerous tolling charges will stop.

I’m surprised the needle didn’t move by much but the update belies/hides the potential. I can’t remember the last time when Hydrodec reported they were happy with feedstock supply. I’ve been following this for more than 10 years. This at a time when output capacity is 2-3x that of old. The multiplier effect kicks in only when they reach high levels of utilisation. The extra product line is something I’ve been expecting/waiting for a long time.

Moving into profit is now when, not if, but we do need a benign economic backdrop to continue, and there are some future headwinds on the horizon, not least of which are geopolitical.

I’m pleased with progress, and if they can get a foot inside California, that really would be game changing. I suspect it won’t be done alone, maybe through licensing or joint venture, and only once the current business model proves to watchers that it turns a profit.

Thanks legobrickgirl, and you.

Yeah, its a long way to travel, and it finishes pretty quickly.

If you strip out the strategic review costs, and the AUS write down, the picture is pretty strong. I'm assuming the partner in Australia became a hostile one. i.e prevented site access, maybe even legal means to slow down the sale etc. Not something you can stop if that is what happened.

I'm not sure I've read it correctly but the tolling agreement must've included a clause that had Hydrodec paying an onerous set amount whether it is in operation, or not. Presumably the eye watering 7.1m, included this, plus legal/termination costs, and business write down valuation... a bitter pill, given it didn't generate very much revenue.

Carbon credits are becoming a useful additional revenue, as well as the unique selling point.

I wonder what the sale price will be for AUS, under $1m, $2m?

Yes very encouraging, and I’m glad Chris is back, he always came across as being very competent.

Welcome back aboard Chris.

Thank you for those excellent reads. I’ve not been of the opinion, that as we haven’t heard much, there isn’t much going on. I think there has been a change of focus to execution, rather than media soundbites.

I’ve always thought, given that they were coming from a low base on margins and output, that any can ramp up on either, could produce significant impacts.

Re the transport. Yes that was always a significant drag on market penetration & margin. Presumably a big reason to locate a second plant. Now with the G&S tie-up, they had more reason to locate near their partner’s supply chain.

If the US doesn’t fall into recession post 2021 (as some predict), I can see the market sustaining a second plant. Once the business model has proven it’s profitability, those new reactor designs could become a rather (nicely) expensive IP.

Excellent read, thanks legobrickgirl.

This doesn’t include any potential added value from collaboration with Slickers. I’m discounting the prospect but it’ll be a nice bonus if anything concrete does happen.

I also want them to flesh out the proposed projects in the pipeline, especially around the potential collaboration. Long term projects obviously eat into capital, so some numbers identifying the possible revenue streams, would be nice.

I’m back

Thanks legobrickgirl, interesting read. It reiterates the feeling that the return promised for so long, may actually appear. Obviously those in long ago, not so much.

I’m waiting to hear how they’ve got on with the feedstocks issues. I think the pressures caused from the Mexican trade in oils, are less so, and with greater capital they can compete for the larger feedstock bids, rather than smaller expensive spot pricing (I’m assuming). If there were going to be any, the new marine regulations will already be having an effect, so the next update should be interesting.

During the slower period the paraffinic market had a less stable time than naphthenic but generally, the market is doing well. Carbon pricing is edging up, and on some platforms, the price floor is shifted up over time. Not sure where & at what price, HYR achieve on their credits but it is another longer term resource to tap.

The consolidation seems to have killed off the market for now. This may have been part of the strategy. Hopefully some activity will be generated with future updates...

I disagree, based on current market conditions, and the impact on LTHs, 42% is reasonably good. As I mentioned, if you are a new investor, apart from the time just before the fire, this seems the best period to be in. The supply chain improvements in the US look real. Divesting the AUS business, will reduce the administrative cost base. Healthier balance sheet, at the very least, securing (with sensible capex spend) the medium term future. The possible slicker collaboration, sounds good but I will discount that until details are fleshed out. Also, apart from some form of licensing/IP development, any project to build infrastructure, will need more funds than existing levels.

Yeah, it’s a good moment for new investors but unfortunately, it exacts a high cost to current holders. Transformed balance sheet, reduction in debt financing... 8-10% removed on the converted debt, should have an immediate material impact. Need more details on Slicker colab... what, in future revenue terms, does the different path of the colab mean. There is the feedstock side and the IP research, with I imagine the EU credits as a long term aspiration.

Yeah, I read the JV note a while back, and wondered the same. One thing discounting that conclusion to me, was the wording. If I recall, they would be using Avista’s process, no mention of the previous IP related to Hydrodec. Maybe it could be a bolt-on after, or who knows, maybe even something around transformer oil. They have a large space, which is being rebuilt. I’m not completely discounting anything, the strategy maybe lower key, so there’s no sense in raising expectations. Another point, being their focus on the US. They’ve been burnt from pushing out, before consolidating a position in their main growth market. With that said, they’re good candidates for possible future collaboration, sooner or longer term, and with the three companies, they would have some serious combined expertise.

Lucky man.... ok thanks David. I know they have trouble with their servers/service provider, that’s why I thought it was the same this time. At least on my end, opening this site, is consistently the slowest one I visit. The previous two days, waiting 10 seconds and nothing appearing, exceeded even my patience.

Was the site down (two days) for anyone else?

The different schemes/projects, and offset sources, probably means the little I know, is dangerous rather than useful. As to US pricing under the scheme HYR is accredited to, (American Carbon Registry) I believe an average of under $5. The legacy offsets were lower, something like $3 but hopefully the newer ones get better pricing. It really needs to be nearer $10 and beyond, to help the current position.

Hi lego, Sorry for slow reply. It’s nothing exciting. I was just referring to the carbon market in the EU. I recall writing a post a long while back, that due to transitioning regulation, and reduction in free permit supply (if I recall), prices would eventually rise. Currently on a rip, with prices at €22. Although the permitting may not be comparable to the US register, I was saying it’s a shame HYR aren’t part of this scheme. It’s a little difficult to get prices for the US carbon market but it’s not as lucrative. I expect the China market will outperform the US one as well. I haven’t looked in great depth, being outside HYR operations, so a similar mechanism to get permits to market might not exist but a carbon price of €22, if Hydrodec could get into the scheme, then wouldn’t that create an investment case. The extended European patents, also help nicely.

Although I’ve known carbon permit pricing has been on the rise, I haven’t tracked it recently. A telegraph article reminded me of the change. EU permits are now over €20, if only Hydrodec where registered to create the offsets in this region. It would certainly create an investment proposition, in one of the areas they have extended patents.

Indeed, good post.