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/

Oilbarrel.com 30.04.2007

GTL Resources Gets Greenlight To Expand Its Ethanol Operations In The US
Three years ago the name of the game at AIM-quoted GTL Resources was methanol production in Australia but this ambitious project faltered in the face of protracted gas supply negotiations, the costs of construction and financing. By 2005 the company had moved on, switching its focus to the ethanol market in the US.

The company raised 24 million in August of that year to put towards a US$79 million ethanol plant at Rochelle in Illinois, about 80 miles from central Chicago, and production started in December of 2006, bringing much-needed revenues onto the balance sheet. By January 12 2007 the company clocked up its first US$1 million of revenue.

The plant has met expectations and is operating profitably. Managing the margins is the key to running a profitable and sustainable alternative fuels plant an inability to control costs can lead to all sorts of problems. GTL sources its corn from Cargill Inc and has put in place hedges to limit the price it pays for 95 per cent of its corn. During the first two months of operations, the plant paid 60 cents per bushel less than the average Chicago Board of Trade front month futures price and its margin was averaging 80 cents per gallon.

Flushed with the success of this project, which was delivered on time and within budget, the company set about expanding the plant. The expansion should result in a lower per-unit capital cost than for a greenfield project. It will also give greater weight to the companys purchasing power and lead to economies of scale.

Last week there was good news on this front as the company announced that the plants owner and operator, Illinois River Energy (in which GTL has an 85 per cent controlling interest), had received the air permit from the Illinois Environmental Protection Agency to double the capacity from 50 million gallons a year to 100 million gallons a year.

Subject to funding, IRE plans to begin construction in the third quarter of this year. A design build contract is expected to be signed shortly with Fagen Inc, the company that built the original plant. GTL chairman and CEO Peter Middleton said discussions with potential lending banks are now well-advanced. The company believes that it will be able to raise the debt at an acceptable debt/equity ratio, especially as the existing plant is performing well.

The company has also recently received a US$2 million grant from the State of Illinois Department of Commerce and Economic Opportunity, part of a US$5.5 million grant of which US$0.2 million is outstanding, under a programme to encourage the construction of ethanol plants in the state.

Ethanol is a renewable fuel that is produced when starches and sugars, such as those found in grains and other crops, are fermented. It has been used as a motor fuel since the early twentieth century but its use was limited by the availability of cheaper petroleum-based fuels. But increased concerns about air pollution and climate change have revived interest in ethanol.

When combined with petrol, ethanol introduces oxygen into the petrol making it burn more completely so that fewer hydrocarbons, carbon monoxide and other harmful exhaust emissions are released into the atmosphere. It can be blended with regular unleaded to produce a premium unleaded fuel.

But while its properties as an oxygenator are valuable (and indeed mandatory to comply with clean air regulations), the real growth in the use of ethanol is expected to be as a replacement for crude oil-based petrol. The arguments for switching to this renewable fuel are particularly strong in the US, where corn-based ethanol provides support for mid-west farmers and acts as a substitute for costly and politically-sensitive crude oil imports. Stricter environmental regulations are expected to support this switch. GTL Resources sees plenty of opportunities to participate in this growing industry.

During the last 20 years, ethanol production capacity in the US has grown from almost nothing to an estimated 3.41 billion gallons per year in 2004. President Bushs announcement that by 2020 there will be 30 billion gallons of ethanol available as an alternative fuel is believed to be unrealistic but even a market of half that level represents a major growth opportunity. Middleton believes there could be a market of 13 billion gallons by 2020 in the US.

The plants are geographically concentrated in the grain belt of the mid-west of the US, Illinois, Iowa, Minnesota, Nebraska and South Dakota, but the industry is fragmented: one company accounts for 30 per cent of US domestic production and the next largest producer for less than 4 per cent. GTL Resources expects to see consolidation within the industry over the next five to ten years, and plans to play a part in this restructuring.

blimey, back to back daily rises......

I've had to sell mine, due to the imminent listing of HL, for which I needed the funds for, will keep a close eye on this though!

A nice slow recovery.

Yes slow is probably the best way to describe it.

I am still confused with the sp of RVA they have issued a Q4 Operating Update.

RVA
For the full year, sales volume rose to 10.5 million gallons, benefiting from a 94 pct rise in the fourth quarter.

The ethanol producer and marketer said production increased 25 pct year-on-year, with the production currently at 25,000 gallons per day.


The M/Caps are now very similar GTL Market Cap 36.89m, RVA Market Cap 30.72m and they are only producing 10.5mg per year, I know it has been said before gtl's M/Cap should be about 144m with a sp of 652p in comparison at 50mg per year and 1304p at 100mg per year. Am I missing some thing?

yes probably, I stated previously from the New Arden report that they made a comparison between GTL and its rivals.
RVA being one of them, GTL was at around a 60% discount to RVA.

the entire plant originally cost to build. (Est.$107mil)
Takes 18 months to expand.


G D Potts - 06 Apr 2007 17:50 - 1427 of 1520
They've got a graph which creates a peer comparison for GTL based on the S.P and mrkt.cap of each company to create a $/gallon of production comparison.
GTL is therefore currently trading at 2$ per gallon of production compared to Renova - 3$, US BioEnergy $2.5, Pacific Ethanol $3.1 and VeraSun $2.9

This translates into a 40% discount at equity level to GTL's peers. (Based on an SP of 150 p = $3 dollars a share)

Agreed G D Potts, hence why I suspect a major rerating this month with I hope the analysis report from Morgan Stanley as the catalyst. IMO DYOR!

Ditched a few more today for some EcoEnergy.

Potts
I may top slice at 10

haha, i hope i can one day do the same with both.

GTL Resources PLC
11 May 2007


For Immediate Release 11 May 2007

GTL Resources plc
('GTL' or the 'Company')

Appointment of West LB

http://moneyam.uk-wire.com/cgi-bin/articles/200705110700424156W.html

West LB

http://www.westlb.de/cms/sitecontent/westlb/westlb_de/en.standard.gid-N2FkNDZmMzU4OWFmYTIyMWM3N2Q2N2Q0YmU1NmI0OGU_.html

I see both the graphs have gone tits up now!

ghjones2
Fixed the corn chart.

Can some one help me with the right ethanol chart here's the link.

http://new.quote.com/search.action?q=ethanol&qt=contains&e=&t=future&to=86&a=overview&o=50

No idea sorry, not so sure it matters anyway Driver since they have hedged all their output for this year as they have with the corn. So price fluctuations mean very little at the moment.

Potts
All the same nice to have them in the header.

a cost benefit analysis may show otherwise.