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/

Lapin a la moutarde - my favourite!!

driver ... no fun cartoons on there! ..... and another thing, why should we not use corn for ethanol .... if we didn't bloody rabbits and pigeons would eat it all.

I seem to remember the Arden report adressing this Haystack - should put your mind at ease.

--

'One estimate is that corn needs 30 per cent more energy than the finished fuel it produces.'

That seems like a strange product. You end up with a net energy loss.

http://www.dailyreckoning.co.uk/article/ethanolproductionincreasesbutisitavalidalternativetooil0045.html

HAYSTACK!

There are two negative issues which are being aimed at ethanol:
Energy balance. A report from Cornell University suggests that it takes 70% more energy to produce ethanol than it yields. Since this study improved operating efficiencies have enabled a plant to now produce 15% more ethanol for 20% less energy. In addition a number of other studies have suggested that the energy balance is positive by up to 60%.

If the energy used to produce Ethanol is itself from renewable sources, then problem solved. Maybe even the farmers could use Ethanol in there tractors ?

no it's not! ...... maize is a greedy crop; using maize for ethanol prevents that same land/crop being used for other food crops; the price will be subject to futures fluctuations twice over - firstly as a foodcrop (already a lively market) and then exacerbated by demands for ethanol production.

Cynic, I'd appreciate your comments on why you think this stock is in the current downward trend and has been for the last year or so. I would have thought that 'production start' would have been a positive influence, but am dissapointed to see it has not been so.

you flatter my expertise, sir! ...... however, though i stand to be corrected, GTL is still some way off profitability ..... further, apart from polite noises about how well production is doing, i do not recollect seeing a recent trading update, bullish or otherwise ..... boredom sets in and investors move their funds elsewhere .... new investors see nothing to inspire so stay away

Cynic, GTL ought in theory to be profitable already, given that IRE is now producing ethanol at full capacity.

What we are waiting for is the financials to back this up, although a broker note to predict some figures would be nice too.

Ethanol keeps heading upwards: 232 a gal.

I keep wondering if I ought to buy more GTL. Maths says yes; "common sense" (whatever that means) says I've gone overweight enough and am already on a 30% paper loss.

easy answer then ..... NO

Thanks Mr C, appreciate the perspective, this one's going against my 'gut feel' and I just wanted a 'realists' viewpoint. Not so much flattery as an acknowledgement that you are never too old to learn. (I also like the dry/cutting wit and wind-ups, but thats a different story).

Soul T..., like you I am now 'in the hole' at greater than 30% and am waiting to see an uptrend indicator to possibly top up. The dilemna of course is whether to add to GTL or top up an existing 'goody'.

Hoo hum, decisions, decisions.

sorry guys .... to paraphrase what my lovely Dad taught me re decisions .... you know what's right and you what's wrong; if you wish, you can override the former ... that is making a decison

fyi, my break even is 225 or thereabouts and not remotely tempted to buy more

Cynic / I was of course expressing Irony, you are right that maize is a greedy crop that uses a great deal of water. In France last summer there was alot of resentment towards farmers who are turning there crops over to maize. Like America, France are also looking at producing more ethonal.

Ethanol by it's own won't be the solution, but at least it's a start. But from an investment point of view for the future, GTL should be in a very good position with the US government now actively promoting ethanol use.

I topped up my holdings last month, and now have my average percentage holding in this company. So I wouldn't be tempted to top up any more, but I'm certainly happy to hold on to my shares now.

spitfire ... i was more concerned with maize's greed for nutrients than water

hi there, I bought 100,000 of these gtl before the consolidation on 28th november 2006. I paid 2.34 pence per share for one lot, and on the 13th november 2006, I bought another 100,000 at 2.23 pence so mine with dealing costs are averaging out at 2.3059 per share. around the same price as you have paid. if I was to sell them now I would be taking around a 1500 loss. Not good. I would not buy any more of these shares. Maybe they will take off soon on some good news. I hope so. My advice on this one is to tuck them away and forget about them for a while. Good luck to all holding.

Spot on janetbennison, tuck them away for the future.

I brought 1000 at 2.45 (equivalent) November, then another 1000 at 1.95 last month for average price of 2.20.

I am looking forward to the next fortnight with GTL.

I've got a pretty good average of around 180. Bought heavily at 200, further at 200 a few days later, then 190 and finally 160. Still waiting to decide whether I will buy more.