Gas to Liquid
Commencement of Operations Started 28/12/2006
The strategy of GTL Resources plc is to produce liquids such as methanol and ethanol from stranded gas, corn and other feedstocks with quality counterparties. GTL manages all aspects of a project: finance, feedstock supply, production and marketing.

In line with its strategy of seeking to develop and exploit markets for alternative fuels, GTL has, since the beginning of 2001, concentrated primarily upon developing methanol projects, principally in Australia, and, more recently, ethanol project work. The Board has recognised the strategic benefits of acquiring a cash generative asset on a shorter time scale than the typical methanol construction time of three years. In furtherance of this strategy, on 6 September 2005 GTL Resources acquired a controlling interest in Illinois River Energy (IRE) to build an ethanol plant at Rochelle, Illinois, through its wholly owned subsidiary, GTL USA, which has been established for the purpose of investing in ethanol projects in the USA. GTL USA has invested in IRE by way of a subscription for units of IRE pursuant to the Unit Purchase Agreement.

This project has the advantage that the Plant is expected to produce revenues on a shorter time scale and at a significantly lower capital cost than the methanol plant in Australia.

The Company intends to further expand within the ethanol industry in the United States or other suitable markets by selective acquisition of low cost production facilities. The Company sees itself as a potential consolidator of ethanol plants in a particularly fragmented market.

FT Tip
GTL Resources, an Aim-listed company. It raised money to build an ethanol plant in the US. Raw materials costs have risen but the price of ethanol has gone through the roof. The earnings potential should be spectacular.

New Plant

Construction started at Rochelle, Illinois site in September and production from the 50 million gallon per annum ethanol plant is expected to commence in the fourth quarter of 2006. Following unusually mild weather in Illinois the project has progressed well and is on schedule and on budget. Whilst the Companys main efforts centre on the successful delivery of the US ethanol project at Rochelle, the potential expansion of that site to 100 million gallons is being investigated. In addition and consistent
with GTLs stated strategy for the expansion of its interests in the ethanol industry, other ethanol opportunities have also been identified and will be analysed. Pictures Of The Site Under Construction March 27, 2006 http://www.illinoisriverenergy.com/html/construction.html


Arden
http://gtlresources.com/documents/ArdenAnalystResearchNote.pdf
http://www.gtlresources.com/documents/ArdenAnalystResearchNote.pdf
BBC News Item On Ethanol
http://news.bbc.co.uk/nolavconsole/ukfs_news/hi/newsid_4940000/newsid_4948400/bb_wm_4948456.stm

Ethanol Priceshttp://ethanolmarket.aghost.net/
Ethanol as a Transportation Fuel
http://energy.ca.gov/afvs/vehicle_fact_sheets/ethanol.html

Annual report for 2006
http://www.gtlresources.com/documents/GTLAnnualReport2006_001.pdf
Pics from Ethanol Producer Magazine of GTL's plant.
http://ethanolproducer.com/plant-images.jsp?plant_id=302&image_id=59
Commencement of Operations Started 28/12/2006
http://www.gtlresources.com/
Economics of Ethanol
http://www.ces.purdue.edu/extmedia/ID/ID-339.pdf
2 July 2007 GTL Resources FY pretax loss narrows, plans 13 mln stg placing to fund expansion
http://moneyam.uk-wire.com/cgi-bin/articles/200707020705014067Z.html
GTL Web Site
http://www.gtlresources.com/

Put it another way: the price of ethanol has gone up 25 cents per gallon in the last month. That makes a difference of $12.5 million to IRE's top line and quite a lot to the bottom line, given that 95% of the corn intake is hedged.

If that translated to a bottom line difference of 4 million for GTL, at PE 10 you've covered GTL's current market cap right there.

Still, please DYOR, etc.

Anyone know how you can take out a futures contract on eth?? :o)

ST let's hope Morgan Stanley read your posts.! If the numbers are roughly right, GTL needs to shout about it, probably being cautious though during first months production after testing.

By the way safe journey when you make it & hope a warm welcome awaits you back in Blighty!

Morgan Stanley presumably won't publish they're results immediately - anyone know the standard time lag between such events (E.g.Meeting and then notifying the market).

Silvermede, if Morgan Stanley like my stuff they are welcome to offer me a job :o)
I agree your analysis. GTL is doing the right thing by allowing the analysts to take care of producing the estimates.

Thanks for your good wishes - am sure all will work out when I return to the UK. Thanks for your mail, too. Not sure if I agree with Monisha, but will keep my eyes peeled and maybe do a little more digging to see if she has a point.

Crikey, but the price of corn is powering away at the moment. Still, with GTL/IRE having already hedged 95% of their requirements for the forthcoming year's production, it's not so serious, and one has to hope that by the 2008 season, the farmers will be planting more corn to cover increased demand.

Although maybe GTL/IRE could make more money by simply selling their hedged corn without bothering with the tiresome process of turning it into ethanol ;o)


GDP, I suspect that the answer to your question is a piece of string, as none of us outsiders know what was discussed between MS and PM, or how far MS has got with producing its research note.

If they get stuck, they can borrow my figures :o)

soul* ... the prob with ethanol from corn is that the company is always hostage to food stock futures ... unlike jatophra hich isn't

Has something happened to the corn and ethanol graphs at the top of each page, i get the error "Incorrect Contract Name, user_is_not_authorised"

Anyone else have the same problem?

Cynic did you read about that company in Shares mag which produced Algae as a biofuel for around $1.30 I think - Any idea on the prospective cost of DOO's when they get their Jathropa up and running? Just thought that maybe by the time DOO get its crop s working then there may be a new, better and cheaper alternative.

Still think Ethanol has got a large role to play in the U.S for at least the next 5 years so i'm not to worried about GTL.

Yep. Graphs at the top now no longer load for me as well.

Why is GTL dropping if it has such good potential?

Becuase the potential has not yet been realised

GDP ..... no idea about comparative costs etc, so i'll merely reiterate my point that jatophra is a non-food crop so is not subject to other market forces that apply to maize ...... trouble with jatophra, is that i think it takes 7/10 years from planting to full maturity, but am happy to be proved wrong.

meanwhile, i also hold a small stake in GTL, though with ever waning enthusiasm.

yea i was just disturbed that a new fuel was already only a year away from market which trounced Biofuel and BioDiesel in cost and subsequently price!

I assume something like this will appear on Reuters for GTL - I'll buy one if/when they become available - just an example below for ECG -

Analyst Research
Report Title Date Provider P. Price
Econergy International PLC: Business description, financial summary, 3yr and interim financials, key statistics/ratios and historical ratio analysis.This report is essential reading for any serious investor, providing comprehensive financial information on a company's performance,... 14 Feb 2007 Reuters Investment Profile 12 10.00

New chart gone in for Corn, but I can't find one for ethanol, If any one can help?

Ive got invalid referer on mine

Potts
Hows that with both?

working now thanks - good to see ethanol rising too

Thanks for fixing the charts, Driver. That's a very decent rise on ethanol today - more than makes up for the rise in corn prices, I think. (Although with 95% hedged, we're not too worried).

The 6-cent rise adds another 1.5 mill to IRE's topline :o)

From FT.com, dated yesterday, regarding the corn price:

Corn prices hit a 10-year high for the second successive day, touching $4.33 a bushel. Corn prices have doubled in the past year and the latest surge came amid talk of a possible dry summer in the US, which is the worlds largest corn producer.

Traders said a La Nina summer weather pattern in the US and reports of dry weather in South Africa, which is the worlds tenth largest corn producer, helped underpin prices.

We are concerned that prices are nearing overbought levels, but still feel that prices have additional upside potential, said Dan Cekander, softs commodities analysts at Fimat.