Quadrise Fuels International Plc [LON:QED] the London-headquartered synthetic emulsion fuels developer, has seen its shares jump to the highest point in the last year this morning (4th December).
The AIM-listed company opened trading at 2.405p and was up to 2.8215p by 09:00 and hit 3.178p later in the morning. The interest in Quadrise, which as we have previously reported, has had a tough year, was due to a successful fuel trial in Morocco. In its last results the biofuels manufacturer reported a 19.2% increase in loss to GBP3.1m following a 13.3% rise in production and development costs to GBP1.7m, and as reported a lot was riding on the Morocco fuel trial, and thankfully for the company and its shareholders, the trial went well.
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The company had been attempting to prove its product with a trial for its proprietary synthetic transportation fuels, MSAR and bioMSAR for most of the year. Initially scheduled for May as reported, the trial was cancelled due to a mechanical failure, and then the company needed to return to the market for more financing.
By August the company had fixed its machinery, but the engines broke down once again, much to the frustration of CEO, Jason Miles, who said: “The design issues experienced with the pumps to date were not foreseeable and are very frustrating for all concerned. We remain highly confident that once the trial resumes following the installation of an alternative pump, we will be able to demonstrate the benefits of MSAR and bioMSAR in the commercial trial for our supportive client.”
Third time lucky
However, as November closed, the company had another go, and found third time was lucky, as the trial with its commercial partner in Morocco was successfully completed at commercial scale, with the fuels used providing the expected thermal energy for drying, when compared to Heavy Fuel Oil, exporting the equivalent of 33MW of power from a single burner.
Notably, this is equivalent to the energy-consumption of a medium-sized container ship, and given Quadrise’s ongoing trials with Mediterranean Shipping Company, the world’s largest container shipping company, bodes well for 2024 – if the company can chase off the gremlins that infested its machinery in Morocco in 2023. Tom Fraine, industrial analyst for ShoreCap, a broker which has Quadrise under coverage said: “The opportunity in the marine sector with MSC […] could be worth a multiple of Quadrise’s current enterprise value in potential annual revenues if only [a] small percentage of the shipping company’s overall fuel demand was switched to MSAR or bioMSAR. MSC currently consumes close to 10m tonnes of [heavy] fuel oil annually and we believe Quadrise could charge around USD50 per tonne for licensing its technology.”
The company said that emissions from the combustion of its fuels were very low, and well within environmental limits for the site. This was the first demonstration of bioMSAR in an industrial application. Quadrise is now preparing a technical report to submit to the client within the next month.
Miles said: “We’re delighted to have finally completed this commercial-scale trial in Morocco, which has demonstrated the stability and performance of both MSAR and bioMSAR in one of the client’s major facilities.”
Quadrise commercial supply negotiations
Following the successful trial, Quadrise is now in discussions with the Moroccan client to secure long-term commercial supply. The company has been promising jam tomorrow, saying at the start of this year it would be in commercial revenues by August. This was pushed back to the end of the year and has now been subsequently pushed into 2024 and the end of Quadrise’s financial year.
With the success in Morocco this looks more likely, however, Quadrise is still, as reported, dealing with other issues, specifically in Utah where in August Quadrise and its partner Valkor Technologies were knocked-back by the State of Utah’s Board of Oil, Gas and Mining, which turned down a large-scale unitisation plan put forward by Valkor for the Asphalt Ridge oil sands project Valkor and project sponsors Heavy Sweet Oil and AC Oil wanted to drill 119 wells at Asphalt Ridge to produce heavy oil.The company updated the market, saying that it understands that Valkor will conclude drilling permits and project financing relating to their primary project site in Utah by the end of the calendar year 2023. Provided a minimum of USD15m is successfully raised by Valkor, under the terms of the Site License and Supply Agreement signed in June 2023, Valkor will pay Quadrise an initial USD1m licence fee and a further USD0.5m upon delivery of an MSAR Manufacturing Unit to the project site in Utah.
Although Quadrise shares have had an encouraging rally this morning, the share price is more-or-less where it was this time two years ago (2.6627p) and in the summer of 2021, Quadrise shares were trading hands at 5.5p a share. Over one-year the company has returned 26% and its shares have ranged between 0.66p and 2.6p over a 52-week period. The company has a market capitalisation of GBP34.4m.
