Yes an engineer but lets call it a TECH Engineer. Compressed air technology is its main business, develops industrial air compressors and Gas seals and whats more it provides them for the OIL and GAS industry.
Very close to commercialisation now with its compressors and seals and todays deal ( see below ) should bring that very close.

Charges upfront payments, continuing royalties and development contracts so revenues are not lumpy.

It as a market cap circa off the top of my head 20 million(hope my calculator is now working) and as circa of 5 million cash on the books, very nice.

Some very big names as customers.

Heres todays announcement...........

Corac Group Plc
26 May 2004


For Immediate Release 26 May 2004


Corac Group plc ('Corac')

Joint Industry Programme for Downhole Gas Compression

Corac, the intellectual property and licensing company specialising in
compressor technology, is pleased to announce the signature today of a Joint
Industry Programme ('JIP') for the development of its unique, patented downhole
gas compression technology.

Following the recent successful completion of a Shell funded feasibility study
which evaluated both the technical and economic viability of the technology,
considerable industry interest has been generated, culminating in the addition
of a further four major international oil and gas operators to the project.

The participants of the JIP comprise ConocoPhillips, ENI, Husky Energy,
Repsol-YPF as well as Shell, all of whom have gas assets worldwide which they
believe could benefit from this game changing technology. As well as covering
the development costs for the next phase, the participants will also make
substantial resource available to ensure the final product specification meets
the requirements of the industry.

Corac's downhole gas compression concept involves the coupling together of a
number of axial compressor modules in a single compression train for
installation in the well bore in close proximity to a gas reservoir. In this
location, a modest uplift in pressure results in a very significant increase in
gas production compared with conventional methods using surface compression,
thereby accelerating gas production and cash flow from a producing asset.
Potential production rate enhancement of up to 40% has been demonstrated through
the application of downhole gas compression during a number of gas field case
studies carried out over recent months.

Placing the compressor downhole could also have the effect of being able to
lower the reservoir abandonment pressure which in turn would materially increase
the ultimate recovery from a gas field, thereby further enhancing the economic
benefit from the installation of this novel application of existing technology.

Phase 1 of the JIP is scheduled for completion by the end of 2004, with further
engineering and development work leading to the manufacture and testing of a
prototype downhole in a producing gas well within the following two years.

Commenting on the JIP, Professor Gerry Musgrave, Chairman, said:

'The support from such eminent oil and gas companies vindicates Corac's
development to date of the downhole gas compression project and gives the Group
another product line to bring to the market using its core technologies. It is
the start of a major business development opportunity which is expected to have
significant international ramifications throughout the upstream natural gas
industry.'ENDS.

Although loss making at the moment it shouldnt be very long before this one turns the corner.

Outlook

The Company has a loyal, talented workforce dedicated to the innovation and
exploitation of the technology. Successful trials have demonstrated the
commercial performance in Corac's industrial air compressor and its seals. The
Board is striving to deliver the right manufacturing and sales licences which
will yield the best returns in the long term.

We are confident that a number of deals, which have been subject to recent
intensive negotiation, will be successfully concluded in the near term.

Short to medium term investment, and anyone interested should DYOR and please remember you are responsible for the timing of your buying and selling actions.

cheers GF.

I bought a few of these yesterday - posted over the road.

Kermit is also very keen on the company.

Hi Gausie, nice to hear you and kermit are in, just one big seller today as kept the price from furthering. Never mind plenty of news should be forthcoming.

cheers GF.

Moving up nicely the third day on the trot.

cheers GF.

I wish I had heard about it 3 days ago but thanks for starting the thread GF

Well the deals are now starting to flow this is just the first one. Hoping this one gets some newsflow over the next week..................................

08 June 2004

For Immediate Release 8 June 2004


Corac Group plc ('Corac' or 'the Company')

Maiden Licence Deal


Corac, the intellectual property and licensing company specialising in air
bearings and compressor technology, today announces the signing of a sales and
manufacturing licence agreement for its dry gas seal technology.


Corac's dry gas seal technology is the result of several years' research and
development and is leading edge technology with:-


A 300 bar capability at elevated temperatures;
Up to 40% less leakage than current industry standards;
Extremely low break-out torque;
Modular design resulting in lower cost of ownership.


Corac has licensed this technology on an exclusive basis to AESSEAL plc, an
established UK mechanical seals manufacturer with subsidiaries or branches in 22
countries and with 75% of its sales in overseas markets. AESSEAL will have the
rights to manufacture and sell Corac's patented technology worldwide and will be
able to rely on Corac's know-how to develop and enhance its new dry gas seal
product range. Through this transaction, Corac now has access to an estimated
global dry gas seals market of US$100 million per annum.


The deal has three revenue bearing components for Corac. Upon signature of the
agreement a licence fee will become payable, together with a royalty element
once the seals are in production and generating sales. An engineering
consultancy agreement covering ongoing product development and applications
engineering work will also come into effect at the same time.


Commenting on these contracts, Professor Gerry Musgrave, the Chairman, said:


'This is a very valuable development validating Corac's intellectual property
licensing business model. The joint efforts of Corac and AESSEAL will ensure a
significant worldwide presence in this important sector. It is particularly
pleasing that this innovation by Corac will be harnessed to a rapidly expanding
British manufacturer for the benefit of UK plc.'

cheers Gf.

Results due on the 15th of September I have been told.

Might pay to get in before then.

cheers GF

This ones moved up in early trading.

cheers GF.

A small but appreciated move up on this one today. Hoping for more.

cheers GF.

Solid set of results from Corac and pleasing outlook statement highlighting the move towards commercialisation.....................

Corac Group Plc
15 September 2004


For Immediate Release 15 September 2004


CORAC GROUP PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004


Corac Group plc ('Corac'), the intellectual property and licensing company
specialising in compressor technology, announces interim results for the six
months ended 30 June 2004.

Operational Highlights

Maiden Licence Deal with AESSEAL plc for Dry Gas Seal Technology

- Upfront payments, further development money and royalty payments
now expected.

Joint Industry Programme (JIP) for Downhole Gas Compression Technology

- With ConocoPhillips, ENI, Repsol, Husky and Shell.

Sufficient cash reserves for completion of current development plans.

Financial Highlights

Turnover for the period 318,000 (2003: 11,000)

Operating loss 966,000 (2003: Loss 1,120,000)

Cash balance of 4.8 million (2003: 6.8 million)


For further information:

Corac Group plc 01895 813463
Prof. Gerry Musgrave, Executive Chairman
Roberta Miles, Finance Director

Buchanan Communications 020 7466 5000
Richard Darby
Suzanne Brocks


NOTES TO EDITORS

Corac is an Intellectual Property engineering group, focussing on high speed
electrical direct drive turbo machinery based on its unique expertise in gas
bearings for which it holds several patents. Corac has reached its technical
goal of creating an innovative 'no oil' turbo compressor, with further exciting
branches into the design of a unique gas seal, as well as a research and
development programme for the downhole gas extraction industry. Further
information on Corac is available on the internet at
www.corac.co.uk



CHAIRMAN'S STATEMENT

Introduction

The first six months of 2004 have been important for the Corac Group. As an
intellectual property company specialising in turbo machinery, the first
manufacturing and sales licence was signed for its innovative dry gas seal and
marks the beginning of an income stream from this product. Additionally,
sufficient progress on its compressor technology has resulted in a Joint
Industry Programme (JIP) with five major international oil and gas operators for
the development of its unique, patented gas compression technology.

Continued progress has been made in research and development for all three
product lines, namely the high-pressure dry gas seals, the downhole gas
compressor and the high-speed industrial air compressors.

The financial results for the six months ended 30 June 2004 show a loss after
tax of 860,000 (2003: 969,000) on turnover of 318,000 (2003: 11,000).

Financial Review

Turnover arose primarily from a licence agreement with AESSEAL plc for Corac's
dry gas seal technology, together with associated engineering work that
commenced in June 2004. In addition, turnover has arisen from the JIP project.

The Company also received 48,000 (2003: nil) of grant income to contribute
towards the further development of the high pressure dry gas seal range.

The operating loss of 966,000 (2003: 1,120,000) has reduced from 2003 as a
result of the improved turnover which has been partly offset by increases in
administration costs including sales and marketing, new premises, patents and
professional fees.

In March 58,500 warrants were exercised at 28.8462 pence per share. The
remaining warrants lapsed on 1 June 2004.

The Company had 4.8 million in cash and treasury deposits on 30 June 2004 which
will enable the current development plans to be completed. The Board is
cognisant that additional funding will be required to bring the downhole
technology to its full commercial potential. It has been exploring various
structures to achieve this and to unlock the maximum value for shareholders in
the future.

High Pressure Dry Gas Seals

The success of our technology has been demonstrated to a number of leading
worldwide seals companies, and there was much interest in signing a
manufacturing and licence agreement from several of these organisations. Corac
has now licensed this technology on an exclusive worldwide basis to AESSEAL plc,
an established UK mechanical seals manufacturer with subsidiaries or branches in
22 countries and with 75% of its sales in overseas markets. AESSEAL will have
the rights to manufacture and sell Corac's patented technology and will be able
to rely on Corac's know-how to develop and enhance its new dry gas seal product
range. This transaction enables Corac to earn royalties based on a percentage
of an estimated global dry gas seals market of US$100 million per annum.

Throughout the due diligence process the intellectual property rights were
subjected to very detailed examination, and the unique features of Corac's
design enabled the IPR to stand up to worldwide scrutiny. The resultant deal
gave Corac an upfront fee and engineering development money for further product
enhancement. All eventual sales will result in a royalty fee being paid to
Corac. This ensures that Corac and AESSEAL will work in collaboration to achieve
effective penetration of the market.

Downhole Gas Compression

Corac's downhole gas compression concept involves the coupling together of a
number of axial compressor modules in a single compression train for
installation in the well bore in close proximity to a gas reservoir. In this
location, a modest uplift in pressure results in a very significant increase in
gas production compared with conventional methods using surface compression
alone, thereby accelerating gas production and cash flow from a producing asset.
Potential production rate enhancement of up to 40% has been demonstrated
through the application of downhole gas compression during a number of gas field
case studies carried out over recent months.

The JIP announced in May is proceeding in accordance with plan. The
participants in this project are ConocoPhillips, ENI, Repsol and Husky Energy
who join Shell, the initial funder of the feasibility study. The value of the
JIP, as well as covering the development costs for the current phase, ensures
that the Company has access to the requirements of gas fields in three
continents, thus defining the product specification that can match the needs for
the valuable market opportunities.

Industrial Air Compressor

Over the last twelve months, following a number of successful demonstrations to
potential licensees of our 90 kW no oil compressor, Corac has designed a family
of machines based on three spool sizes to meet the range of industry
requirements from 90 kW up to 500 kW. This has been achieved by taking Corac's
existing 50 kW spool and two new spools, rated at 150 kW and 250 kW. The
Company is pleased to announce that its 150 kW spools have been running this
summer and are going through rigorous test procedures. A low pressure and high
pressure spool, each of 150 kW, together offer a 300 kW no-oil high-speed turbo
compressor. For this size Corac has introduced two air ends per motor, giving
enhanced efficiency, as well as providing the established attributes of smaller
size, lower maintenance, improved efficiency and, of course, no oil
contamination.

Corac's marketing department is at present analysing applications of the
Company's high-speed turbo compressor spools to give added value to existing
compressors in the marketplace. This would enable end users to have the
advantage of extending the output of their existing machines at minimum cost and
minor modification to their installation.

The nature of our high-speed turbo compressor operating with our unique air
bearings also lends itself to gas refrigeration technology where Corac's
bearings could accommodate denser gas, providing better coolant to its systems.
The Company is currently investigating this concept with a view to a partnership
which could provide access to a sector four times the size of the established
oil free compressor market.

Management

The strengthening of the Board in January 2004 with the appointment of Gerd
Cromm is resulting in extensive marketing of our high-speed industrial
compressor. New avenues are being opened in the market and not least, existing
major players are viewing Corac as a potential partner rather than competitor.
The Company has all the key technical experts to enable it to continue to be
innovative with its engineering solutions.

Outlook

The Company has started to deliver its technology to the commercial world. The
diversity in Corac's products enables us to address large established markets
for dry gas seals, no oil compressors and the refrigeration compressor sector.
In addition, the Company's unique downhole gas compressor is opening a new
market by providing key enabling technology for the acceleration and recovery of
the strategic gas production on a worldwide scale.


Professor G Musgrave
Executive Chairman

cheers Gf.

Numis Morning Meeting....

CORAC* (25p) Interim results - BUY, Target Price Under Review.

cheers GF.

Institutional demand increasing for this companys equity.

Corac Group Plc
20 September 2004

Corac Group Plc ('the Company')



The Company was notified on Friday 17 September that FMR Corp and its direct and
indirect subsidiaries and Fidelity International Limited ('FIL') and its direct
and indirect subsidiaries have increased their holding to 6,182,566 ordinary
shares of 10p in the capital of the Company, representing 9% of the Company's
issued share capital. The interests are non-beneficial and include interests
held by unit trust schemes in the UK and, by virtue of his shareholding in FMR
Corp and FIL, Mr Edward C. Johnson 3d.


This information is provided by RNS
The company news service from the London Stock Exchange



cheers GF.

Some good news coming out on this company since the results last week.........

Numis do their thing....

Numis Morning Meeting Notes
20th September 2004

CORAC* (25.5p). Vast potential - BUY target price 54p

cheers GF.

Equity Development also backing this company and heres last weeks note..........

Corac
September 2004
Interim results: Marketing progress confirmed
Corac made two key announcements during Q2 namely the 26th of May Joint
Industry Programme (JIP) for the downhole gas compression technology and the
8th of June licence agreement for the dry gas seal technology.
These prior announcements featured prominently in the interim release and analysts
presentation. However, there was also positive news flow regarding the groups industrial
air compressor, where new routes to market continue to be identified. Investors will also
be pleased at the limited cash burn in the first half of 2004 Coracs net funds
diminished by only 0.57m from the end 2003 position and at 4.774m at end June 2004
still equate to circa 7p/share.
We remain comfortable with the 38p/share fair value target specified in our 9th of
June note issued after the maiden licence agreement given the good progress.

The chairmans statement was inevitably dominated by the two key Q2
announcements which were discussed in Equity Developments updates (the 9th of June
note mentioned, plus a 1st of June note evaluating the JIP). We return to these issues
later below.
As regards the groups industrial air compressor technology, the work of new director
Gerd Cromm in evaluating additional potential routes to market was mentioned in March
when the possibility of adding a Corac turbo compressor to existing oil-free
compressors to pep up their performance was mooted. Evaluation of new routes to
market continues, with Corac also now considering the possibility of its air-based
bearings instead being immersed in refrigeration gases and used for compressors in
chillers and air conditioning units, a market sector estimated to be worth $7bn p.a.
As regards the reported financial statistics, the eye catchers were the noteworthy
turnover number and the modest free cash outflow of 0.587m (compared to 1.086m in
H1 of 2003 and 2.581m for 2003 as a whole). The turnover number was boosted by the
one-off licence agreement with AESSEAL for Coracs dry gas seals technology which we
estimate to be between 200,000 and 300,000. The one-off licence fee also boosted
H1 2004 cash flow.
Coracs free cash outflow was also contained by the collection of the 0.427m 2003 R&D
tax credit (included in debtors at end 2003), by the 0.048m industrial grant receivable to
help develop the dry gas seals (which will feature in the full year numbers) and by the
rapid invoicing of the JIP partners for a significant amount of the development costs
expected in 2004.
Administrative expenses of 0.703m were 13.8% above the H2 2003 level and were
increased by extra costs associated with sales and marketing, Coracs new premises,
patents and professional fees, the latter including some linked to evaluations of how to
maximise shareholder value as regards the downhole gas compressor operations.

Fortunately, development costs declined by 8.1% to 0.581m and were 30.1% lower
versus H2 of 2003 reflecting the lessening spend associated with the development of a
family of industrial no-oil compressors. This P&L line has also been helped to a degree
by some labour costs now being classified within the cost of sales line.
Going forward we assume that Corac takes the full amount of the JIP development costs
in the revenue line.
Business Lines
Corac technology in this area is now exclusively licensed to AESSEAL plc, which
operates in 22 countries and ranks No.4 worldwide in seals manufacture. The analysts
presentation stressed anew the complementary nature of AESSEALs existing low
pressure wet seal products used in pumps etc and also how Coracs high pressure dry
gas seals can now be marketed too at the low pressure end of the market (down to 20
bars) which could generate high unit sales volumes, albeit at slimmer margins. The
more competitive low pressure wet seals market is substantially larger than the $100m
p.a. high pressure dry gas seals market.
To recap on the P&L ramifications of this deal, Corac will benefit from:
The up-front licence fee (all received in H1 of 2004).
The immediate provision of an engineering consultancy service covering ongoing
product development work and applications engineering (accruing therefore as of 8th
of June 2004).
Royalties once product manufacture commences linked to end market sale prices.
These royalties will probably be at the rate of 5-10%, tapering off as volumes rise and
Corac management remain hopeful that they could commence in 2005 reflecting
extensive pilot plant testing. A complete dry gas seals system can cost $60,000-
100,000 per installation but clearly AESSEAL must first take market share from the
two dominant players which include Smiths Groups formidable John Crane
subsidiary.
A market launch for the dry gas seals is planned at AESSEAL before the end of the year,
with Corac engineers assisting in the construction of test cells for these in recent weeks.
Corac staff will assist AESSEAL sales staff and again all of this will be AESSEAL funded.
The May JIP announcement led to ConocoPhillips, ENI, Husky Energy and Repsol-YPF
joining forces with Shell (which originally funded a feasibility study to assess the
technical and economic viability of the technology). Phase 1 of the JIP development work
will be completed at the end of this year and is now funded, whilst subsequent work is
expected to lead to the manufacture and testing of a working prototype in a producing
well by end 2006. Coracs development costs linked to the downhole gas compressor
technology have become chargeable following the formation of the JIP: effectively an
element of R&D has become chargeable to third parties. We had not appreciated
hitherto that development costs in 2004 even pre the May signing would also be largely
covered.
The JIP members own working gas fields in three continents which will prove a major
plus when assessing the suitability of Coracs downhole gas compression technology for
operating in differing climatic and geological conditions.
It was too soon after the formation of the JIP for Corac to report any progress and, in any
event, the proving of this technology has always looked a long haul owing to the not
insignificant technical difficulties. Accordingly, the analysts presentation focused largely
on the potential of this technology, reiterating its benefits (increases in early gas
production of up to 40% and gas field life extensions of up to five years).
Mention was also made of talks with several other parties that could join the JIP and of
how an estimated 36,000+ new gas wells were drilled worldwide in 2002 when 483,000+
were in production. A questionnaire of existing JIP participants also led to the finding that
by 2009 they could require a significant number of units in the future. We estimate that
this could be as many as 85 (30 for large boreholes @ 1m per system and 55 for small
boreholes @ 0.6m per system). While this survey is useful as a guide to possible
purchase intentions, it must not be taken at face value to project future revenues as the
technology still requires much development. It does show that even a small penetration
of the aggregate gas wells in production tally could generate massive product revenues
for Corac.

Corac Group plc
3
Note that the JIP members will not fund eventual assembly and manufacturing of the
downhole compressors which could, according to Corac, be a significant cost. Hence the
continual evaluation of whether eventually to demerge or sell this technology, or to seek
to fund its later progression and then lease out the equipment. Nothing has been ruled in
or out.
Still no licence deal of any form, but the numerous merits of the groups no-oil
technology (lower power use, lower wear rates, the small compressor footprint etc) have
been proven by extensive testing. Corac has also progressed well as regards its aim of
providing a seven-strong machine family range offering shaft power output levels from
90-500kW rising in 50kW increments - via using three spool sizes of 50kW, 150kW and
250kW. Work and testing remains necessary for the 250kW spool.
Joining a 50kW low and high pressure spools results in a 100kW no-oil turbo
compressor and in a similar vein joining a 150kW low and high pressure spool creates a
300kW no-oil turbo compressor. Investigation continues as to the scope to bolt one of
these onto an existing (oil-free) compressor to ginger up its performance at modest cost.
The notion of marketing stand-alone no-oil compressors which could capture sales in
the 2bn p.a. dry screw oil-free compressor segment has however not been abandoned.
Coracs no-oil compressor uses air to lubricate its bearings. However, the bearings are
able to operate better using denser refrigeration gases; more heat can be removed and it
is also possible to have stiffer bearings too, leading to longer drive shafts. One matter
now under investigation is the provision of compressors for use in refrigeration
equipment (chillers and air conditioning units). This market segment is estimated at $7bn
p.a. according to a Japanese source (JARN). There are apparently 20 large
manufacturers of refrigeration equipment and Corac is talking to 3 of them. A newly
developed refrigeration gas which would work well with Coracs no-oil compressors has
added impetus to this market evaluation work.
Another route to market is being evaluated. Atlas Copco developed a water screw
compressor earlier this year which could be the shape of the future, although thus far it
can only run at 37kW of power output. Corac is studying a possible hybrid water
compressor based on fusing together a water screw compressor and a no-oil turbo
compressor. This hybrid would offer the best of both worlds in that the water screw is
best for low volume/high pressure applications and the no-oil turbo for high volume/low
pressure situations. Talks are apparently under way to develop this innovative
technology.
Financial
Last year Corac elected to take a R&D tax credit for 2001 and 2002 in cash, this being
reflected in the 2003 P&L and physically received in H1 of 2004. It is too soon for Corac
to decide if the 2003 R&D tax credit will be taken thus or merely used to boost the
existing 8m of tax losses.
The H1 net cash outflow from operating activities line shows a 46.5% decline to 0.645m
which compares to the mere 13.8% decline in the groups H1 operating loss. The receipt
of the above-mentioned 0.427m R&D tax credit helps to explain the differential, as does
the rapid invoicing mentioned for the JIP monies.
Net capex increased by 36.1% in H1 of 2004 but was 84.5% down on the H2 2003 run
rate when the industrial compressor family was being developed and the move to new
premises was made. It still seems probable that 2004 capex will subside back towards
the far more subdued 2002 level.
Industrial R&D grants of 0.2m in total are still expected in 2004 and 2005, linked to the
dry gas seals. The 2004 full year receipts are likely to be double the interim amount.
Chairman Professor Gerry Musgrave looks justified in suggesting that Corac is
transitioning out of its R&D mode into a marketing mode. If only investors could settle
down with a firmer view as to what the sales prospects are for the groups no-oil
industrial compressors. Still, at least all possibilities are now being actively explored here,
whilst there is a highly positive news flow for the dry gas seals and the downhole gas
compressor technology.
Our revised estimates are detailed below. We now look for a pre-tax loss of 2.0m in
2004 followed by one of 2.4m in 2005 with net cash expected to decline to circa 3.6m
at end 2004 and 1.2m at end 2005.

Our previous projections in June after the seals licence deal had been for a pre-tax loss
of 1.490m in 2004 then one of 1.995m in 2005 with net cash at end 2004 of circa
4.3m and at end 2005 circa 2.4m. However, there remains considerable scope for
error with any forecasts whilst as mentioned we have not assumed any further R&D cash
tax credits (it would make sense for Corac to secure these). A swing factor in the
amended estimates is that administrative expenses now seem likely to be considerably
higher than we had estimated previously.
Corac still looks to have more than enough by way of cash resources to see it through to
the middle of 2006.

cheers GF.

Looking forward to gains in this. An undervalued company that as massive potential.

cheers GF.

Up 10% on a real bad day for small caps. Still very cheap at this price.

cheers GF.

Up nearlly 14% on a real bad day for small caps.

Time to get in I feel if your not already in.

cheers GF.

Heavy volume again for this one today. Should tick up at any time.

cheers GF.

On Aim, Corac Group, which licenses oil-free compressor technology, gained 3.5p to 32p as institutions clamoured to get hold of stock in the wake of a positive presentation by the company at an industry seminar hosted by broker KBC Peel Hunt.

cheers GF.

Watch out, some big news is coming. No jives what I have been told. And told by a good un.

cheeres GF.

From Citywire today...............

Dreams of gas bonanza pump up Corac
Published: November 2004 < PREV | 1 | 2 | 3 | 4 | NEXT > TOTAL PAGES: 4
By Cliff Feltham, Companies Correspondent Back To Today's News Printable Version

Related Articles
Corac in the red but looking rosy:
13:10 Wed 12 February 2003 read
Corac: more than hot air?:
13:22 Mon 23 September 2002 read







After months as flat as a punctured tyre, shares in AIM listed compressor technology group Corac are steaming ahead.

Priced at 25.5p on 11 November when joint broker Durlacher published a note, shares (CRA) are now 33p - a rise of 29%.

Although still a long way off their mid-2001 float price of 105p that is some recovery. What is going on?

Corac is an intellectual property and licensing company specialising in compressor technology. It has targeted three main markets industrial air compressors, high pressure gas seals, and downhole gas reservoir production.

The current excitement is undoubtedly due to prospects for seeing its technology taken up by the gas industry. In simple terms, small compressor units would be lowered into a pipeline close to the reservoir and used to increase the pressure so more gas can be pumped out. That means producers get their hands on the gas and the cash that much quicker.

This is no pie in the sky stuff. Five big majors, Shell, ConocoPhillips, Repsol, Husky Energy and ENI, have launched a joint industry programme to explore the potential for adopting the Corac technology. That means they are paying development bills easing the cash flow pressure on the company.

Executive chairman Professor Gerry Musgrave apparently gave a progress report on the project during an oil and gas seminar for analysts hosted by KBC Peel Hunt and public relations group Buchanan Coracs advisors last week.

Musgrave appears to have managed to enthuse his audience sufficiently to revive an interest in the stock.

Certainly, figures recently published by broker Numis seem to support that enthusiasm.

The broker believes the market to sell compressor units to the gas producers could transform Corac into a multi million pound sales company. Numis says studies have shown the technology is capable of boosting production through a well by 40%.

There are 480,000 gas wells worldwide of which 20% would be suitable for the technology. With another 24,000 wells coming on stream every year the market is obviously vast. With an average unit price of 750,000 sales of just 500 compressors would yield 375 million and gross profits of 260 million.

Even if sales were confined to the five members of the joint programme it would generate turnover of 65 million by 2009 and gross profits of 45 million. Of course this is all blue sky research and a lot could go wrong.

But in the meantime Corac is pressing ahead with plans to sell its technology to other industries, having just signed a maiden licensing deal with the worlds largest manufacturer of industrial seals.

Corac made a loss of just under 1 million during the first half to the end of June and despite income from the licensing deal, will make a full year loss of around 2 million. There is 4.8 million cash in the balance sheet so there is no urgent need for more funds, although there will have to be a top up to manufacture and fully test the gas compressor prototypes.

However, a decision on that will only come once the oil majors have completed their work. If they decide to back the technology there will be little difficulty in going to shareholders who include tycoon John Gunn for more money. Sales could start in early 2006.

Citywire Verdict

The excitement around Corac seems justified. You cannot ignore the interest being shown in the technology by five large energy companies. Of course they may discover flaws but investors in a stock of this kind have to be prepared to take that risk. A punt worth taking.

cheers GF.