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/

It was Spitfire, GD, I just asked the question. Good idea about mailing GTL.

Great!!!
This is becoming more than a joke

E. Mail reply confirms Spitfire43 figures.

Forgive delay. Am in USA. Answer is we produce 180,000 tons of cattle grain and are selling it at over 30 dollars more than the price in our original road show model. Regards Peter

Sorry to avoid the tough stuff myself but could soul or silvermede make the ethanol calculations and add the by products on too - assuming that fixed costs are spread evenly over all the 3 products prodcued and sold - and then maybe come up with a PE ratio?

I'm also going to evaluate my portfolio at home tonight and see if I can sell anything to top up - these levels are just a bit to irrestiable.

Tom W of t1ps.com today re-iterates his BUY stance as GTL 'now a cash cow'

added a measly 300 shares to my holding. And worringly I got them at 1.6175, lower than the market price. Anyone know what this usually means? (Obviously i can take an educated guess that people want rid of GTL and are subsequently selling it lower but your thoughts would be helpful).

not that its got too great an impact but the cost of corn has dropped considerably to 436.6 today, but better is ethanol up to 2.2 yet still a huge drop in share price.crap!

By products info can be found on GTL own site and also Arden Partners have released a comprehensive research document at - www.gtlresources.com/documents/ArdenAnalystResearchNote.pdf

The prices I found at www.thepigsite.com ( amazing what you can find on the web )

I shall do some number crunching tonight, and post something later(After the football). To me it looks as if the Arden 2008 PE of 14.5 is to conservative and our forward PE of 4.5 too optimistic. It might be in the middle somewhere, we will see, at first glance at the figures behind Arden it would seem they have used some very low price assumptions.

I'm tempted to get in on this price, but... I'm going to be disciplined due to current market sentiment and may wait a little longer as I feel this has the potential to drop further still!

Come on Reading

Just printing off the Arden report thanks spitifre - will run over it tonight. you taken a stake in Armor Yet?

imo, everyone should sit on their hands and hope the bloodbath is temporary, though there are no guarantees.

GDP
I must admit we played poorly after first 6 mins. Still biding my time with Armor at the moment. As cynic sugests it's best to wait for markets to settle first.

Have spent the night comparing Arden Partners figures for 2008 estimates, I won't print the whole results it would take up too much space. Below I will show the figures I have used against Arden. For wage, overhead cost etc I used Arden figure.

Input prices
Ethanol cost - Arden = $1.4m - Mine $2.10
Dried Distillers per tonne - Arden = $85 - Mine = $105 (From Peter Middleton today )
Carbon Dioxide per tonne - Arden = $6.5 - Mine = $6.5
Corn Price per bushel - Arden = $2.25 - Mine = $3.55

PRODUCTION FIGURES
Ethanol Gallons - Arden = 50m - Mine same
Dry Grain Tonnes - Arden = 178,600 - Mine same
CO2 Tonnes - Arden = 144,600
SALES
Ethanol - Arden = $69.5m - Mine = $105m
Dry Grain - Arden = $14.8m - Mine = $18.75m
CO2 - Arden = $0.9M - Mine = $0.9m
Revenue total - Arden = $85.3m - Mine =$125.11m

COSTS
Corn - Arden = $40.4m - Mine = $63.36m
Chemical/Utilities - Arden = $20m - Mine = $20m
Gross Profit = Arden = $25.10m - Mine $40.48m

Wages, Overheads, Shut Down Program, Amortisation and Depreciation = $8.09

Operating Profit - Arden = $17.02 - Mine = $32.40
Net Interest - Arden = $2.7m - Mine = $2.7m
Profit before Tax - Arden $14.3m - Mine = $29.70
Tax at 35% - Arden = $5m - Mine = $10.84
Profit after Tax - Arden = $9.3m - Mine = $18.86m
Minority Interest - Arden = $1.4m - Mine = $3.02m
GTL Profit - Arden = $7.9m - Mine = $15.73m

In Pounds - Arden = 4.27m - Mine = 8.5m

I can't work out how Arden have arrived at a EPS figure of 11.6p, so taking my 99% higher profit figure and applying this to to EPS would give EPS = 23.08P. Then if I err on the side of caution a EPS for 2008 of 20P would I think be fair giving a PE of 8.5p.

Further e. mail from Peter - Mention also a website update on production this week.

Cattle grains were in the model at 75 dollars.Plant now running at annual rate of 53 mill gallons with not tech problems.GTL is in the best shape in its history .The effect of small sales on share price is not good but we will continue to run our business well and hope for a correction in the market. Regards Peter

If I take the retained GTL profit from Arden 4.27 and my figure of 8.5m, and devide them into the 22.7m shares in issue then ratings below.

At 4.27m = EPS off 18.8p and PE of 9
At 9.24m = EPS off 37.7p and PE of 4.51

Can anyone explain to me how Arden came to a figure of EPS of 11.6p.

Good luck to everyone today, could be a bumpy ride. We should have a better idea of how far correction is going after DOW closes.

It's grim all round this morning ! Everything taking a battering.. I'm well down on lots of shares, including this bag of shite.!

expect to see a recovery later today and tomorrow though... lots of bargains about ! ('cept for GTL!)

Everythings RED!!
Am going to carry on topping up on GTL till the end. After reading Arden;s thoroughly conservative review of GTL (They were writing before plant was even near to completion) I have a much better understanding of the compay and really do think that GTL is worth at least 3 a share in the next couple of months alone.