Oxford Catalysts (LON:OCG) (147p and 1% of the JIC portfolio) The shares are taking a bit of a hammering today, down 13% to 147p. The Company has not made an official announcement so I have done some fishing around. Last September Oxford Catalysts (OCG) announced a contract to supply a 1000 barrels per day(BPD) gas to liquids plant (GTL) to Calumet's Karns City site in Pennsylvania. In that statement it said that plant design would be completed by end of 2012 and that a final decision to proceed was expected in H1 2013. It seems that in its Q4 results conference call Calumet whilst remaining committed to the project are getting cold feet about being the "first to market" and are therefore taking their time. They are doing some more up front engineering analysis to make sure that it is the right project for them to do. They went on to say:
"We feel very strongly about the economics of the project and we feel strongly that the technology works on paper, we just want to make sure that we engineer it almost thoroughly before we give a final go or no decision , so that's the project we'll be speaking over the course of the year".
Clearly this is a little disappointing but in a concept stock such as this, is to be expected. It will be a bumpy ride as the market over reacts to both good and bad news. Good news could easily come at any moment. OCG is expecting an order from Ventech before the end March; in its announcement of 19th November revealing the agreement with Ventech OCG said:
"Ventech is required to place an order with the Group for FT reactors for the first commercial facility by 29 March 2013, estimated at $8 million".
The Calumet delay may make it more difficult for Ventech to deliver, or it may not!
Conclusion: The volatility in the stock is precisely the reason I only bought a 1% holding at 149.5p last December. I suspect the fall has already been overdone but I will not be adding yet. I am happy with a 1% holding at this stage in the Company's development. Should it fall further I would hope it would get some support around the 125p area at which it raised £30m in December.
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