It’s been a year of positive progress for The Armchair Trader’s ’one-to-watch’, Quadrise Fuels International Plc [LON:QED] the London-headquartered synthetic emulsion fuels developer.
The company opened the week at 2.1p and was up to around 2.2p by the time people had finished their cornflakes. Although the company’s shares are down 20% over one-year, the share price has been moving in the right direction again over the past quarter, up 22% over the last three months.
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Quadrise’s problems in 2023 have been well documented in these pages, mainly due to delays in key projects in Utah and Morocco a hangover from the Coronavirus period. These were exacerbated by the difficulties the biofuels company had in sourcing spare parts for trial rigs that had developed issues at client trial sites.
New capital injection
However, as 2023 closed Quadrise managed to close its supply-chain issues and get successful trials underway. In March the company tapped the market through a GBP1.5m placing, followed up by an open offer that raised another GBP1m in April.
April was a busy month for Quadrise, with the company publishing a slew of updates. First, Quadrise announced positive progress with its client, Valkor Technologies in Utah. This project had previously had a hold-up due to the State of Utah’s Board of Oil, Gas and Mining, turning-down a large-scale unitisation plan put forward by Valkor and project sponsors, Heavy Sweet Oil and AC Oil. The proposal was to drill 119 wells at Asphalt Ridge to produce heavy oil.
However, after review, Quadrise announced that Heavy Sweet Oil had received the green light from the regulator and had additionally secured a multi-million funding package to start drilling. The new test will yield 20 to 40 barrels a day of heavy sweet oil from which samples will be sent to Quadrise for conversion to MSAR (multiphase superfine atomised residue fuel) and bioMSAR (which is currently created by converting vegetable oils, animal fats, or other types of biomass into a stable, water-in-oil emulsion).
Compelling economics and environmental credentials
If the conversion is successful, Quadrise expects that commercial marketing to marine, utility and industrial customers could begin by end-2Q24.
Jason Miles, Quadrise’s CEO said at the time: “We are delighted to see that Valkor has reached another operational milestone and look forward to the commencement of their drilling operations and the receipt of new heavy sweet oil samples for testing at the Quadrise Research Facility […] The adoption of Quadrise energy decarbonisation technology combined with Valkor’s low carbon extraction methods is expected to result in highly-marketable, low-sulphur fuels with compelling economics and environmental credentials.”
The biofuels manufacturer followed its Valkor announcement with the news that its long-standing trial of MSAR and bioMSAR with MSC (Mediterranean Shipping Company), the world’s largest container shipping company and Cargill was progressing according to schedule. As previously reported establishing MSAR and bioMSAR as an alternative marine fuel source with MSC, could be a game-changer for the company.
The AIM-listed company also said that it was accelerating its joint development agreement with Dutch biofuels specialist Vertoro to combine Vertoro’s crude sugar oil product with bioMSAR to create a marine fuel suitable for leisure boats. The partners have completed a prototype motor yacht to run on the biofuel produced through the partnership which, although not as revenue-enhancing as, for example a potential MSC agreement, is still an important step forward to creating a more-sustainable marine transportation system.
Innovative approach
Tom Fraine, an analyst for Shore Capital, which has Quadrise under research said: “Quadrise continues to focus on moving current projects towards revenues, whilst also progressing efforts towards longer-term zero emissions solutions. We are pleased to see the acceleration of the latter through an innovative approach between Quadrise, Vertoro and a leading yacht builder.”
And eventually, at the end of May, Quadrise announced a one-year agreement with its Moroccan partner OCP, a manufacturing and mining conglomerate, to start commercial discussions with third parties, such as refineries and terminal operators to supply MSAR to OCP and well as co-fund a commercial trial at OCP’s Jorf Lasfar site.
It’s been a busy first-half for the energy solutions company, with a slew of positive news, which counterbalances the disappointment and delay of last year. If Quadrise continues with the same momentum it’s not conservative to say that the company’s share price might be somewhere between 4p and 5p by the end of the year.
