After slipping as much as 7% as profit takers emerged earlier this morning, fuel technology specialist Quadrise Fuels International (QFI:AIM) gains 1.25% to 24.3p post the release of its results for the year to 30 June 2013.
As the company is pre-revenue the numbers themselves are not hugely relevant but investors could be forgiven for looking to book some profits given the meteoric rise in the share price. In the last 12 months the stock is ahead by an eye-watering 213.6%.
A big breakthrough came at the end of August (29 Aug) with the news its patented MSAR fuel will be tested by Danish container shipping firm AP Møller Maersk (MAERSK-A:CO) on operational vessels. This testing is scheduled to take place through the remainder of this year ahead of a full commercial roll-out in 2014. The company uses technology licensed from global chemicals firm Akzo Nobel (AKZA:AS) to convert heavy oil residues into a patented low-emission 'emulsion fuel' called MSAR.
This product is an alternative to heavy fuel oil (HFO) – used in marine transportation and for internal power generation within refineries. In a conventional refinery HFO is manufactured, like MSAR, from residues but these have to be combined with more valuable distillates such as diesel. This penalises the refinery because diesel can typically be sold at a premium to crude oil prices while HFO usually sells at a discount.
MSAR is instead produced by combining water with a small dose of speciality chemicals and this translates into enhanced margin per barrel of oil which can be shared between the refiner, Quadrise and the end user. Alongside these results Quadrise has outlined a re-jigged agreement with Akzo Nobel which will see it become the licensor of the MSAR technology and share ownership of future intellectual property (IP) – chairman Ian Williams tells Shares he hopes this will help address investor concerns over who owns the IP.
The company has £3.2 million in the bank and today's results hint at an equity raise if there are unforeseen delays on the Maersk project. 'If we get to the stage where there are a set of circumstances which lead to a requirement for a safe cushion then we would act,' Williams adds.
The company continues to work on a venture with Saudi Arabian conglomerate Rafid to trial the MSAR process at refineries operated by state-owned energy giant Saudi Aramco and initial agreements have also been secured in the Americas with Mexican state oil firm PEMEX and in June with Colombian oil major Ecopetrol (EC:NYSE).