17 Feb 2020 07:00
17 February 2020
Quadrise Fuels International plc
("Quadrise", "QFI", the "Company" and together with its subsidiaries the "Group")
Notice of Interim Results and Business Update
Quadrise Fuels International plc (AIM: QFI) provides the following update ahead of its interim results for the six months ended 31 December 2019, which the Company intends to announce on 30 March 2020. The results announcement will be followed by an investor conference call, further details will be provided in due course.
Business Development Overview
The Company has continued to make progress across its portfolio of business development opportunities with global partners. As highlighted previously, the strategy of pursuing a diversified range of opportunities provides Quadrise with access to a rich body of experience through its various partners at negligible cash cost, combined with opportunities to fully leverage its in-house business development capabilities. The Company remains focused on translating the opportunities being progressed during 2020 into projects with clear commercial revenue potential.
Developments Post-AGM
Progress has been made in a number of areas that has enabled Quadrise to increase the breadth and depth of its business development programme, addressing the vast majority of the potential MSAR® market opportunity. Developments by MSAR® market segment are summarised below.
Industrial Applications
Morocco - Two site visits to Morocco took place, in December and January respectively, concluding with the completion of a Hazard and Operability (HAZOP) study of the pilot kiln and the associated QFI equipment that will be used to undertake the trial. The pumping and heating unit fabrication at our Quadrise Research Facility ("QRF") is now close to completion and the fuel for the trial is due to be manufactured at QRF this month. The fuel and equipment will then be transported to site in time for the trial to commence in March 2020. Pending the positive outcome of this first phase, which we are anticipating should be completed in early Q2 2020, the intention is to progress to the second phase of paid feasibility studies for larger trials that are a precursor to commercial roll-out in the partners' facilities.
Power Applications, Refinery Refuelling, & Co-Development Opportunities
·; Kingdom of Saudi Arabia (Al Khafrah Holdings and Aleph Commodities) - In conjunction with the Al Khafrah Holding Group, work continues to deliver high level engagement with major stakeholders in KSA to agree, as soon as possible during 2020, project details for a power plant trial. As mentioned during the AGM, this work includes the opportunity to consider MSAR® manufacture in KSA at a lower cost.
·; South America (Freepoint Commodities) - QFI and Freepoint jointly met with senior management of a national oil company in South America, where there is an MSAR® opportunity for refinery refuelling, leading to domestic power generation and export opportunities that would reduce distillate import requirements for the client.
·; Mexico (Redliner & Freepoint Commodities) - Quadrise continues to engage with key stakeholders and decision makers in the energy sector to initiate MSAR® technology testing and deployment in Mexico. MSAR® opportunities include refinery refuelling, domestic power generation and fuel exports that reduce distillate fuel imports. QFI has recently met with a major independent power project developer, who is supportive of MSAR® deployment, to provide economic and environmental advantages to new build power projects.
·; European Refiner -The client is now comparing the economics of MSAR® with another refinery solution (which requires complex refinery testing during Q2 and Q3 2020) to enable IMO 2020 compliant fuel supply. It is anticipated that the client will make a decision at the end of Q3 2020. If MSAR® is selected, the Company would expect to finalise the site trial agreement, including schedule, for refinery refuelling during Q4 2020.
·; Nouryon - We have held positive discussions regarding business collaboration opportunities between Quadrise, Nouryon and related companies within the Carlyle Group.
·; Kuwait (Aleph Commodities and Hawazin) - An MSAR® refinery refuelling opportunity is being explored for the new refinery and information is being exchanged with the client team to review this in more detail alongside with Hawazin. If the project economics are positive, Quadrise will undertake a feasibility study and develop an implementation plan to present to the client team in Kuwait.
Marine Applications
·; Marine - The implementation of IMO 2020 compliance remains the main focus for shipping companies and operators during Q1 2020. The Company has had positive meetings with senior management of two major shipping companies, each with major fleets and leading positions in scrubber implementation in their segments of the shipping industry. Further meetings with these companies are being planned during H1 2020 to investigate potential MSAR® Letter Of No Objection ("LONO") testing and commercial deployment, on success, to reduce fuel costs further whilst improving environmental performance. Quadrise is also investigating the merits of establishing, or linking with, a physical bunker fuel supplier, to provide a supply network for high sulphur fuels in parallel with MSAR® for the LONO testing opportunities. Further updates in this regard will be provided, as appropriate, in due course.
Upstream Applications
·; Merlin - Joint meetings have been held with an upstream developer with MSAR® potential in Africa, and parallel opportunities in South America are being jointly screened.
·; Other - Quadrise is also in preliminary discussions directly with upstream developers in Africa and North America, both of whom have concessions for extraction of heavy sweet crude oil / bitumen that potentially would benefit from the implementation of MSAR® technology.
Other
There are no material updates to report during the period to developments with the European Oil Major, Maersk, Bitumina, JGC or API Poly GCL.
Funding
Our existing cash resources continue to enable the Group to pursue our business development activities throughout calendar year 2020, with a further £2 million of funding potentially available to the Company from August 2020 pursuant to the previously announced convertible security instrument. If the Company is able to draw down this additional funding in August 2020, subject to conditions precedent being met, the additional funds would be expected to meet project expenditure that is currently anticipated. However, the Company is cognisant that in order to have a high degree of confidence that this additional funding is available, we will need to be able to demonstrate substantive progress on our projects and for this progress to be reflected in a steadily appreciating share price.
The QFI Board believes that the business development pipeline above provides the platform needed to deliver our strategy of translating opportunities during 2020 into projects with commercial revenue potential, and we look forward to providing further updates on progress.
For additional information, please contact:
Quadrise Fuels International plc +44 (0)20 7031 7321
Mike Kirk, Chairman
Jason Miles, Chief Executive Officer
Cenkos Securities plc +44 (0)20 7397 8900
Nominated Adviser
Dr Azhic Basirov
Ben Jeynes
Katy Birkin
Peel Hunt LLP +44 (0)20 7418 8900
Joint Broker
Richard Crichton
David McKeown
Shore Capital Stockbrokers Limited +44 (0)20 7408 4090
Joint Broker
Toby Gibbs
Fiona Conroy
FTI Consulting +44 (0)20 3727 1000
Public and Investor Relations
Ben Brewerton
Ntobeko Chidavaenzi