RNS Number : 2693A
D1 Oils Plc
31 July 2008
D1 Oils plc ('D1' or 'the Company') issues the following update ahead of the publication of its Interim Results for the half year ended 30 June 2008 which will be announced at the end of September 2008.
The first half of 2008 has been a period of significant development and change for the business. We have refocused our operations on upstream plant science and planting and have withdrawn from refining and trading activities. The principal focus of the business is now the provision of the technology and services required to turn Jatropha curcas into a sustainable commercial crop for biodiesel production.
There are two components to D1 Oils: a wholly-owned plant science business, D1 Oils Plant Science Limited ('DOPSL'), and a 50 per cent stake in a joint venture with BP for the global planting and harvesting of jatropha, D1-BP Fuel Crops Limited ('D1-BP Fuel Crops'). DOPSL is the exclusive supplier to D1-BP Fuel Crops, on a cost-plus basis, of selected seedlings and
related agronomy support and expertise. It will also receive royalty payments related to the yield performance of the crop.
As previously announced on 9 May 2008, our shareholders approved a placing of ordinary shares at 25 pence per share to realise £14.9 million, net of expenses. Based on the Board's revised business plan, the net funds raised of £14.9 million are expected to allow the Company to remain cash positive through to the end of 2009. Gross cash on hand at 30 June 2008 was £22.2m and net cash was £19.9m. The Company's rate of cash expenditure is in line with the Board's expectations.
Plant science programme
In the first half of the year we delivered the first significant quantities of our selected 'E1' material, capable of increased oil yields, to D1-BP Fuel Crops for planting. Having demonstrated our ability to produce and multiply this first generic selection, we are now working on the next generation of selections chosen for their ability to perform in different climates and soil types.
D1-BP Fuel Crops
Planting is presently underway in India and will recommence shortly in Africa and Indonesia with the onset of the rains. We expect total planting of jatropha to be approximately 300,000 hectares by 31 December 2008.
Older trees planted in 2006 are now beginning to yield grain and we have produced first oil in both Africa and South East Asia. Our forecast for oil production by December 2008 is approximately
1,000 tonnes. Volumes will increase in 2009 as existing trees mature and younger trees become productive.
Refining and trading
We are now in the final stages of exiting our refining and trading business in the UK. The closure of the Middlesbrough and Bromborough sites is on track, and good progress is being made in securing offers for the refining equipment, the sites and their associated obligations. The majority of staff at both locations have now left the business, with further reductions in head count to follow. A small number of operational staff will remain at each site to ensure safe operation during the final closure.
As a result of rising agricultural prices, particularly for food grains and vegetable oils, we see increasing recognition of the need for alternative, sustainable crops that can use unproductive land to produce raw materials for biofuel. We believe that Jatropha curcas is the most significant new, alternative oilseed crop for biodiesel, and that the prospect of sustained high prices for both mineral oil and vegetable oils offers strong support for DOPSL and D1-BP Fuel Crops.
D1 Oils plc
Graham Prince, 020 7367 5600
Corporate Communications 07973 323840
Kevin Byram/Michael Fuchs 020 7404 5959
Notes to Editors:
D1 Oils plc is a biofuels technology company. Our strategy is to develop new energy crops into sustainable commercial fuels. We provide technology and services for the breeding, development, planting and harvesting of new varieties of commercial biofuel crops, focusing on alternative, sustainable feedstocks that are not subject to the same price pressures as food-grade crops. We have an established plant science and planting programme for Jatropha curcas, a robust, tropical oilseed bearing tree. Jatropha produces inedible oil feedstock for biodiesel and is able to make use of land not suitable for arable agriculture. D1 has a 50:50 joint venture with BP for the global planting of jatropha.
This information is provided by RNS
The company news service from the London Stock Exchange