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/

still can't understand why the sp went down from 2.38p (my buy in price 4/5months ago) when there was all this to look forward to...sp should be 2.7 at least now.

News that we already knew but they had to say something to help put a stopper under the S.P.
54 million gallons pa - sounds good.

And if the share price starts to lag again then at least we can expect some news in april - 'stages and is currently expected to be approved in April 2007'. Should give the S.P. a boost when announced.

Thanks for the tip off Laurie.

13 % + This morning - well done GHJ. Would have done the same but am cash strapped and already heavily in GTL.

to be fair, i didnt top up by a great deal added another 250, but all helps to bring my average down (i know some don't agree with that way of thinking).

Good news, hopefully should stop the rot that was happening!!

Just starting to lower today but should hopefully inspire confidence in publications over the next few days.
Managed to buy some more this morning so fingers crossed to seeing a profit for us all.

For what it is worth Tom W of T1ps has re-iterated his Buy stance on GTL.

Yes good news the most important bit is there will be no cash call or rights issue for the expansion so no dilution of shares. There is nothing stopping the sp going all the way to 800p strong buy.

Morning all!

I'm pleased with today's RNS - not only confirms that the co is doing well but also gives us even better figures than we have had previously.

If the company makes 80 cents/gallon on just 50 million gallons, that's $40 mil operating profit.

x 0.85 for GTL share of the IRE plant = $34 mil.

Convert to English at conservative rate, i.e. divide by 2: 17 mil.

Subtract 3 mil for admin costs: 14 mil.

Multiply by 0.7 for quick and dirty post-tax profit = 9.8 mil.

However, the shortcoming with this model of the results is that it doesn't include the payment of interest by IRE, which takes place in what is essentially an off-balance-sheet situation.

IRE has a debt facility of $47 mil. Interest on that at 6% is almost $3 mil, plus you have depreciation of the assets, etc.

But even if GTL comes away with a notional 5 mil net profit, you still have a company that is valued at a current mkt cap of around 37 mil, when it should be over 50 mil if we agree that a PE of 10 is reasonable.

Still looks cheap to me, assuming ethanol prices remain the right side of $2.00 per gallon.

I would buy at this point if I wasn't overweight already. However, this is all IMO. PDYOR, etc.

Driver, I'm not sure if I agree with your last comment, as it seems to me that some kind of share placing is on the cards. Let's hope the co releases some financials first and boosts the SP a little, so they can reduce the dilutive effect, but even at today's SP we'd still be on the right side, as I assume that new shares would not have to be issued at much of a discount given that the current PE is only just over 7.

Once again, IMO, etc.

soul
I thought this put paid to the cash call if there is one it will be small I don't think the expansion will cost that much also it will be split between the banks and the share holders.

"Discussions with banks are well underway on the debt funding for the project.
The Company believes that it will be able to raise the debt at an acceptable
debt/equity ratio, in particular given that the existing plant is performing
well."

Not clear if the revenue from the Dried Distillers Grain is included in the 80 cents/gallon or extra revenue??

From the phrasing, I'd be inclined to say it was extra.

Ultimately, an 8% rise is nice.

However, what still worries me is that this time last week the share price was 160p and is now as i write 157.5p - even after good news.

Concerning.

and only needs to rise another 30/50% to get back to break even!

31% for me, i need 2.06 to break even, although i'm fairly sure that will happen later on this year, so i'm not worried.

60% on the bid sp for me to get to break even (2.38).. seems a long way off from here !

glad the SP has held the 8% gain.
hopefully tomorrow sees a similar gain.

Not suprised price increased today with update released, telling market info we already knew. There must be an update/review on the horizon soon from Morgan Stanley, if positive which I would hope it to be, it would really kick the shares into life.

UK Analyst
GTL Resources (GTL) shares ran ahead by 12p to 157.5p after it announced that its 50 million gallon ethanol plant at Rochelle had been running ahead of planned rates during both January and February. The plant was constructed on time and in budget in December, and peak daily rates have exceeded 54 million gallons a year equivalent, boding well for future production. Meanwhile, the US ethanol producer also said it expected the proposed expansion of the plant to 100 million gallons production a year to begin in the third quarter of 2007.

Spitfire, I agree re the broker analysis. now that we have RNS confirmation of the output, there really should be no reason why MS can't release a forecast.

Speaking realistically/conservatively, 210p a share ought to be on the cards, not counting future capacity expansion or a placing.