HUGE PROSPECT ON D1 OILS

D1 was originally established in 2002 to focus on the development of a portable refinery technology to produce biodiesel for the UK transport industry. During this period, it was concluded that the high cost of rape seed oil, the main feedstock for biodiesel production in Europe, renders its use commercially unattractive. As a result, D1 explored the economics, suitability and yields of a variety of specific energy crops. During 2003, jatropha curcas was identified as its feedstock of choice and the focus turned to securing output from jatropha plantations.

Jatropha was selected as D1's primary energy crop due to it's high productivity, durability and longevity. Jatropha trees can be grown on marginalised land and are durable to the elements. Furthermore, jatropha can grow in areas of minimal rainfall, although it grows better in areas of higher annual rainfall. Jatropha trees produce nuts, which contain oil, for an average of thirty years and generally have their first harvest within two years of planting. Biodiesel refined from jatropha oil complies with EN 14214, the current European standard for biodiesel. Biodiesel meeting EN 14121 specification is an approved blend when mixed with petroleum diesel.

D1 is now commercialising its D1 20 refinery able to produce eight million litres of biodiesel per annum and will utilise jatropha oil as its main feedstock. D1 believes it can maintain low production costs and produce consistent, high volume quality output through sourcing existing feedstock supplies, cultivating new yields of jatropha on existing plantations and setting up D1 20 refineries regionally. D1 is working with highly regarded agronomy and biotechnology research and development facilities in India and South East Asia and is participating in the establishment of nurseries in a variety of locations in the Asia Pacific region. These nurseries will test imported jatropha seeds against indigenous varieties to determine which will grow best under a region's climatic conditions. In addition, D1 has recently acquired the rights to a proprietary growing media which targets the specific nutritional requirements of jatropha.

The global market demand for biodiesel is growing. International energy and environmental policies have helped to create a demand for biodiesel which is estimated to reach at least 10.5 billion litres by 2010 in the European Union alone. Based on current capacity, feedstock availability and positioning in the market, the global production of biodiesel is expected to reach approximately
3 billion litres by 2010, less than one third of the projected demand in the European Union.

D1 Oils aims to become a global, sustainable, low cost producer of biodiesel and supplier of crude vegetable oil used in the production of biodiesel. To reach this objective, D1 will manage its operations regionally, securing plantation rights and establishing refinery operations in each region, thus controlling aspects of the supply chain from seed selection through to the sale of biodiesel to end customers.

To this end, D1 has established four regional operations:
UK (Teesside and London) South Africa (Johannesburg) Asia Pacific (Manila, the Philippines) and India (New Delhi).

Thanks Potts ..... unfortunately I felt obliged to liquidate my holding in DOO in the bloodbath, and see it is now back to previous levels ...... Still have GTL which is doing sweet FA but am disinclined (I think) to jump back into DOO just on rumour ..... also be aware that the markets could still be storing up a big sell-off as certainly both DOW and FTSE seem unable to break out upwards ..... see relevant thread

F*CK ..... shares have absolutely roofed it .... though I see talks are very preliminary and may only be to take large stake rather than t/o ..... Therefore take profits if you are a holder???

Great news...yippee!....Time to accumulate more.

I think you would be brave to dive in now when there is nothing firm to go on ...... would not be at all surprised to see sp react in coming days ... at that point, it may be worth buying, but far from convinced risk/reward are in your favour today.

As a good analogy, take a look at what has happened to RPT ...... similar statement yesterday, and the price bolted from 55 to 70 and even seems to have got to 75 ..... It has now reacted to 65 (though I still would not touch that stock!)

You can be right, cynic.

Im holding for 4. I think you should do the same.
Unlucky there cynic but it does look like, im in too now, GTL will come good too.

Todays FT states that it could be BP or the Russian oil company and might come with a bid of 5.

D1 is worth more than that!

I was not in yesterday, so unless the tumble was merely at close of biz auction, the market seems to be having second thoughts about the value of any bid that may or again may not even be tabled .... That is not to say I do not think DOO is a good share to hold in an aletrnative fuel portfolio (with BFC and GTL, as I have previously suggested)

Todays FT 5 bid complete rubbish.

Even so, a 4 bid would be very attractive, and a bid sometime in the future could be likely.

Wish i was this good at advising myself and acting on same! ...... sp now 275 mid having suggested risk was much greater than likely reward after sp had bolted to about 320 only 2/3 days ago ...... But if it falls much further, the reverse may well apply

Based on forecast revenues for year ended dec 2006 and applying prospective PE ratio of 11( Chemical Industry PE 17.95 but discounting for DOO I have allowed it to 11), I feel the DOO is worth around 4.50 and the bidding company will have to pay a premium of at least 10-15% which roughly amounts to 5.

IMHO, the price will go even higher if DOO is talking to more than 1 party. Let's see what happens in the next couple weeks.

Revenue = turnover not profit ..... so what PROFIT is DOO forecast to make?
Current P/E is -(minus)6.19

cynic
I know the difference between sales and profit. When you sell a business which is a new upstart company which DOO is with a proven product, then you need to value the business using the revenue f'cast numbers (12.9m) x the PE ratio but in this case we do not have any profit as the company is in the development stage and so the next best would be to use the sector PE and discount this PE for DOO which on a fair basis I would say 11 is reasonable compared to PROSPECTIVE SECTOR PE OF NEARLY 18.

So the calculation is 12.90*11=141.9 divide this by 31.60m shares and add on a small premium======5.

I have made some assumptions here.

no kidding! ..... i like the company and may buy a few (as I said, reluctantly sold them in the bloodbath), but I would be more than pleasantly surprised if someone offered even more than 4.00, and that is assuming any bid at all materialises.

Cynic

Do not take my word for it. DYOR I have given my opinion. Do not be surprised, Oil companies are loaded with money with crude at 70+ dollars! and DOO are talking and that is for sure to more than one party!Biofuels is the future!

agree with all you say except except the quantum if/when there is an offer tabled

cynic
Lets hope there is some news in the weekend papers

cynic

This article may be of interest! you can see why BP has been linked to D1.


Release date: 02 February 2006
BP announced today that it is to fund a $9.4 million project by The Energy and Resources Institute (TERI) in the Indian state of Andhra Pradesh to demonstrate the feasibility of producing biodiesel from Jatropha Curcas, a non-edible oil bearing crop.

The project, which is expected to take 10 years, will cultivate around 8,000 hectares of land currently designated as wasteland with Jatropha and install all the equipment necessary seed crushing, oil extraction and processing - to produce 9 million litres of biodiesel per annum. A full Environmental and Social Impact Assessment of all elements of the supply chain and life cycle analysis of greenhouse gas emissions will be completed as part of the project.
In some parts of the world there is only limited availability of land to produce food crops and therefore no surplus which can be used for energy crops. Because Jatropha is drought resistant and can grow on marginal land, it offers the possibility of an economically, socially and environmentally sustainable contribution to energy security challenges in India, explains Phil New, senior vice president of BPs fuels management group. We are particularly pleased to be working in partnership with The Energy and Resources Institute, whose authority and expertise we hold in the highest regard, and with whom we look forward to forming a highly complementary relationship.
TERI will be responsible for the day -to-day management and execution of the project.
Recent developments have made green fuels economically attractive in view of the resource potential of this option and the environmental benefits associated with it, along with employment generation and empowerment of the rural population, said TERI Director-General, Dr RK Pachauri. We at TERI are very pleased to join forces with BP and are confident that integrating the strengths of the two organizations will provide a significant breakthrough for the country in this field, which is full of promise.
Further information:
Name: Vineet Handa
Location: TERI
Phone : +91 (0 11) 2468 2100

Name: Sanjeev Lowe a
Location: BP India
Phone : +91 (0 11) 2375 5344

Name: Wendy Silcock
Location: BP London
Phone : +44 (0) 207 496 4358

The Mail on Sunday says they could be in talks BP has denied this.