VLS.L Regulatory News (VLS)

News release

Velocys plc

("Velocys" or "the Company")

4 July 2018

ENVIA plant update

Velocys plc (VLS.L), the renewable fuels company, provides an update on the Fischer-Tropsch (FT) reactors at the ENVIA Energy LLC Oklahoma City plant.

Since the internal leak in an FT reactor was announced on 15th May 2018, this reactor has been removed from operation and is undergoing analysis by ENVIA's insurance company as it processes a claim. The plant continues to operate using its second Velocys FT reactor.

ENVIA's Root Cause Analysis (RCA) investigation identified the ancillary coolant system as the root cause of the leak. ENVIA has since implemented modifications to rectify a design flaw in the ancillary coolant system serving the second reactor and has also modified operating procedures. The second reactor has now operated successfully without incident through the same cycle through which the first reactor was operating when the leak was detected.

This successful operation of the second reactor supports the findings of the ENVIA RCA investigation. The Company's position remains that the root cause of the leak in the first reactor was a design flaw in the ancillary coolant system and not the result of any flaw in the core Velocys FT technology. The Velocys FT reactor is designed to safely contain this kind of leak to ensure there is no impact to personnel or the environment.

Velocys, as licensor of the FT technology and as a minority shareowner, continues to provide support to the ENVIA JV and the ENVIA team. Velocys remains committed to the ENVIA plant and will continue to work with ENVIA to assess the likely repair cost and consequent funding requirements.

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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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