VLS.L Regulatory News (VLS)

News release

Velocys plc

("Velocys" or the "Company")

13th December 2016

Strategy update: "building the business"

Velocys plc (VLS.L), the company at the forefront of smaller scale gas-to-liquids (GTL), is pleased to announce the result of its strategy review, and has uploaded a presentation to its website outlining further details of its strategy. www.velocys.com/press/ppt/ppt_13Dec_2016_strategy.pdf

Construction of Velocys' commercial reference plant in Oklahoma City is complete, and commissioning is ongoing. The new strategy will build on this and Velocys' leadership position, adopting a business model to increase control over project delivery through a partnership approach and focussing on the most attractive markets.

There are four core themes underpinning the new Velocys strategy:

1. Strategic partnerships

Implement alliances with partners that have the required resources, scale and capabilities to access large, high value markets and drive growth.

2. Business model

With our partners, become the clear market leader by taking control of multiple projects, reducing delivery risk and accelerating growth, whilst Velocys remains capital light, with strong economics from technology sales.

3. The offer

Jointly with our partners, deliver a "one-stop-shop" offer to our customers - the fully integrated and financed, cost effective and operations-ready plant solution.

4. Leverage capabilities

Leverage our differentiated technology, engineering and operational capabilities, working seamlessly with our partners to modularise and drive down costs of the complete offer.

Velocys, through its strategic alliances, will focus on creating sustainable high growth businesses in the following markets:

1. Supply of premium renewable diesel and jet fuels, and premium wax products from landfill gas and woody biomass in specific high growth markets. Markets in North America will be the near term focus;

2. Monetisation of stranded gas, producing premium wax products in North America, as an entry point into other global stranded gas markets;

3. Development of an integrated GTL solution to prevent the flaring of associated gas offshore.

The Company's presentation is available at the web address referenced above.

David Pummell, CEO of Velocys, said:

"Velocys has achieved significant milestones over the last 15 years, culminating in the construction of our commercial reference plant in Oklahoma City, which is now being commissioned. The time is now right to build on our position of strength; we are mobilising to create world-class partnerships to take leadership positions in key high-value markets. I am confident that we have the right strategy that will deliver a substantive growth business. I look forward to providing further details of the strategic alliances that will underpin this strategy as we roll them out."

- Ends -

For further information, please contact:

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.

Notes to editors

About Velocys

Velocys is the company at the forefront of smaller scale gas-to-liquids (GTL), providing the bridge connecting stranded and low value feedstocks such as natural gas, landfill gas or biomass with markets for premium products such as renewable diesel, jet fuel and waxes.

With its partners, Velocys aims to deliver the most economically compelling conversion solution; a fully integrated offer that can be deployed at scale into the growing, attractive markets on which it focuses. Velocys technology, protected by several hundred patents in over 30 countries, is specifically designed for smaller scales, combining super-active catalysts with intensified reactor systems. Standardised modular plants can be deployed readily in a wide range of locations, and Velocys' capabilities and extensive experience deliver a proven route to operation.

Velocys plc is admitted to trading on the AIM market of the London Stock Exchange (LSE: VLS). The Company has a strong, multi-disciplinary staff operating from its commercial centre in Houston, Texas, USA and technical facilities near Oxford, UK and Columbus, Ohio, USA. Its commercial reference plant, which is located adjacent to Waste Management's East Oak landfill site in Oklahoma City, is currently being commissioned.

www.velocys.com