Oxford Catalysts

Clean fuel technologist Oxford Catalysts (OCG) sees breakeven next year, spurred by the widening gap between a strong oil price and a weak gas one. The AIM-quoted company, which lost an unchanged £3.8m in the first half of last year on increased £4.1m turnover, suggests the present discrepancy provides an ideal environment for its Fischer-Tropsch technology, turning biomass and gas into liquid fuel.

Arguing the market for synthetic fuels is poised to take off, chief executive officer Roy Lipski contends this technology offers useful 'arbitrage' between oil and gas, in the wake of huge gas finds around the world, and reports 'most of the enquiries we receive are about what to do with cheap gas.' Oxford Catalysts, which seeks to develop through partnerships with funding providers, is this year demonstrating Fischer-Tropsch's applications in gas-to-liquid fuel conversion in Brazil, supported by Brazilian oil giant Petrobras and Japan's Kobe Steel.

According to Lipski, once installed, the company's catalysts will need replacing every two years, providing a recurring stream in addition to new installations. Having won a symbolic first commercial order from its Portuguese development partner SGC Energia, he says Oxford Catalysts' process would represent between 10% and 30% of the cost of a new plant, but 'would be the element which enabled it to to happen.'

After floating at 174p in 2006, Oxford Catalyst shares have put in a dire performance until recently. Highlighted by Growth Compay Investor at 49p last February, they now stand at 83p. Hold on.