VLS.L Regulatory News (VLS)

News release

Velocys plc

("Velocys" or "the Company")

15 May 2018

ENVIA plant update

Velocys plc (VLS.L), the renewable fuels company, announces that it has been informed by ENVIA Energy, LLC (the operator of the ENVIA Oklahoma City plant and licensee of the Company's reactor and catalyst technology) that a leak has been detected that is believed to have originated inside one of the plant's two Fischer-Tropsch (FT) reactors. The Company is confident that the issue is not a result of a flaw in the core Velocys FT technology.

Based on the preliminary investigation by ENVIA and supported by Velocys personnel, the Company currently believes the root cause of the issue originated with the design of an ancillary system.

Velocys, as licensor of the FT technology, is working with the ENVIA team as well as third party consultants to verify the root cause of the leak and to support the development of a solution that will return the plant to full operation with minimal loss of revenue.

Until the issue has been remedied, the aim will be to operate the Oklahoma City plant using one reactor. It is unlikely that the plant will become cash flow positive in Q2 2018 as previously expected. Velocys remains committed to the ENVIA plant and will work with ENVIA to assess the likely repair cost and consequent funding requirements.

An update will be provided in due course.

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Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

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