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Building the business…roadmap to sustainable growth
December 2016
• Commissioning underway at ENVIAEnergy’s Oklahoma City GTL plant
• Building from a position of strength
• New business model increases controlover delivery - building scale and pacethrough partnership
• Focus on material opportunities ingrowing and attractive markets with thelowest risk
• Realistic strategy – we deliver inpartnership
…the timing is now right!Building the business
2
Achievements
• Commissioning underwayat ENVIA Energy’sOklahoma City GTL plant
• Recognised as thetechnology market leader
• Attractive economics fromlicensing model
• World class technologyand operations team
• Engineering capability isscalable with partners
• Robust major shareholdersupport
Today’s scorecardPositioned for growth
Challenges• Commercial traction of
opportunities and controlof delivery
• Projects require significantcapital
• Exploit our first moveradvantage
• Continue driving downoverall plant costs toaccess broader & deepermarkets
• Organisational scale-up
“...well positioned,but we must nowadopt a newbusiness model thatdrives greatercontrol and focus.”
3
Velocys has the answer to critical needs...Economic bridge connecting stranded and low value feedstocksto markets needing renewable and premium products
Supply of wax – a premiumspeciality product
Supply of premium renewablediesel fuel
Monetisation of stranded gas
Monetisation of landfill gasSupply of premium renewable jetfuel
4
Prevention of gas flaring
Fundamentals that drive the new Velocys
5
Four strategic themes
• Become the marketleader
• Develop and deliverprojects with partners
• Revenues fromreactor, catalyst,operations andlicence
• Selectively inject earlycapital
• Build and enhancetechnology,engineering andoperationscapabilities
• Work seamlesslywith partners
• Drive lowest cost
• Partners withcomplementaryresources andcapabilities
• Drive access andgrowth in material,high-returnmarkets
• Create scale andrepeatability atpace
• Fully integrated,financed, cost-effective andoperations-readyplant solution
Fundamentals that drive the new Velocys
5
Strategicalliances –
world classpartnerships
Businessmodel – takecontrol butremain “capital-light”
Leveragedifferentiatedcapabilities –natural ownerof valuableassets
The offer –“one stop
shop”
• US• Canada: route to global
stranded gas• Asian markets
Robust platform to enter and exploit other markets in the worldBusiness framework
6
• Gasificationtechnology integration
• Offshore flare gasoffer
• One-stop shop offer• Offer ownership• Leverage large and
complementary partners• Lowest cost
• Stranded gas• Landfill gas• Woody biomass
• Renewable jet fuel• Renewable diesel fuel• Wax
Next 5 yearsin focus
High valuegeographic
markets
Strategicenablers
Strategicsolution
development
Robustrevenuemodel
Premiumproducts
Low costlow risk feed
stocks
• Main income from reactor,catalyst, operations, licence
• Continue to license to thirdparties where it makesstrategic sense
Market focus
High value and material markets – next 5 years in focusPremium quality renewable fuels and wax from landfill gas
USA
Renewable fuels and specialitychemicals from landfill
USA
8
Premium quality renewable fuels from woody biomassHigh value and material markets – next 5 years in focus
Supply of premium renewable fuels & carboncredit trading opportunities
USA
California
Renewable diesel markets
Renewable jet market
9
Asian marketdevelopment
Premium quality FT waxes from stranded gas reserves inWestern Canada
High value and material markets – next 5 years in focus
Supply of premium speciality products
Monetisation of stranded gasCanada
10
High value and material markets – next 5 years in focusDevelopment of integrated GTL solution for offshore flared gas
Prevention of gas flaring offshore
Initially entering extended welltest (EWT) market in North America
Longer term, accessing deploymenton-board floating production, storageand offloading (FPSO) vessels fordeployment in Asia and Latin America
11
Substantial short-term potential volume and growthLarge addressable markets
5 year addressable market
10 year addressable market
10 20
Renewable diesel, US
20 10
Renewable jet, US
15 5
Landfill gas-to-wax, US
7 4
Stranded gas-to-wax, Canada
Indicative number of plants
62 29
Total
12
10
Implementation
Targeting strategic partnerships to drive deliveryMobilisation – immediate focus
3Strategic business
partners
“….we are now developing our “go-to-market” plans to unlock strategic deals”
2EPC partners
2Strategic
technologypartners
1Modularisation &
fabrication partner
14
Driving simplification at every possible opportunityMobilisation matrix
Technology EPC
WaxCanada
RenewablejetUS
RenewabledieselUS
Mod
ular
isat
ion
and
fabr
icat
ion
Co
Gas
ifica
tion
Co
Asia
nba
nks
Cornerstonefinance
Trad
ing
Co R
efin
er C
oR
efin
er C
o
Airli
ne C
o
Stra
nded
gas
owne
rs
N. A
mer
ica
Feedstock
N.A
m C
o.s
biom
ass
Stra
nded
gas
in p
ipe
Customer
Ref
iner
s
Trad
ers
Who
lesa
lers
Airli
nes
Spec
ialit
ycu
stom
ers
N. A
mer
ican
Asia
n
15
Key implementation activities
• Implement marketentry plans
• Finalise “the one-stop-shop offer”
• Sign strategicpartner deals
• Position theorganisation toscale
• Establish top-priority projects
• Finalise plan andbudget
Mobilisation
• Implement firstrenewable fuelsand wax plants inUS and Canada
• Developintegratedoffshore GTLsolution
• Develop materialAsian marketopportunities
Market entry
• Rollout multipleplants in targetmarkets
• Mobilise to exploitstranded gasmarkets in SEAsia and Africa
• Enter offshoreGTL market
Growth
16
• Realistic markets create substantial, cash-generativebusiness— An average of 1-2 plants per year over next 5 years would be
sufficient to establish Velocys in its key markets and generatesustainable business
• Strategic partners with need for material volume drive fasteradoption and investment options
• Further upsides not included:— Recovering oil prices broadening GTL market— Blend volume of bio-jet in jet fuel pool exceeds 3%— Incentive schemes (e.g. Californian) extended to other states
and products
17
Deliverable business – next 5 yearsFoundation for a significant business is being developed
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