Mystery surrounds the suspension of shares in green fuels specialist Oxford Catalysts, announced to the London Stock Exchange today.

The company, based at Milton Park, near Abingdon, issued a statement confirming a report in the Financial Times that it is in takeover talks with a bigger company, which could mean it will need to raise money by issuing new shares.

Under legal regulations, Oxford Catalysts is restricted from giving details.

The company is developing a process to produce steam at room temperatures, as well as products, to tap into the market for second-generation biofuels.

It saw revenues grow ahead of management expectations as oil prices soared in the first six months of the year. Revenues rose 82 per cent to £158,000 after a deal was signed for small-scale Fischer-Tropsch plants, which convert bio-waste or flare gas into clean-burning synthetic liquid fuels.

Royalties will total £100,000 this year and increase in 2009 if trials are successful. A second deal with Thai national oil and gas company, PTT, the country’s largest listed company, will deliver more than £100,000 of revenue in 2008/2009.

A further deal signed with Novus Energy, for the production of renewable transportation fuels from organic waste, is expected to deliver revenues in excess of £120,000 in 2008.

Pre-tax losses for the six months to June 30 increased to £1.3m from £545,000 in the same period last year. Cash and short-term deposits totalled £13.1m.