Renova Energy (RVA) is a US-based company listed in London which specalises in producing ethanol from grain to add to petrol in order to lower emissions. Already profitable, turnover is expected to leap over the next couple of years as US legislation (passed yesterday - see RNS) requires a big increase in the use of ethanol based fuel. With enviromental rules tightening this Company could be in for a very profitable time. As usual DYOR.

Renova Energy says December saw record monthly production
AFX


LONDON (AFX) - Renova Energy PLC said it saw record monthly production of 477 Mgal in December 2005.

The ethanol production, distribution and marketing company said it has added four distribution terminals in new markets within the states of Washington and Colorado.

It also said a feasibility study of the Idaho plant is progressing with key process parameters defined.

Renova is benefiting from higher prices for its products and said in the nine months to end-Dec it saw a 5 pct increase in average realised prices.

Ethanol sales volumes in the nine months grew to 4,329 Mgal from 4,144 Mgal for the same period in 2004.

Average daily production over the nine months was 15,840, down from 16,040.

The board said production yields improved significantly in the quarter ended Dec 31 2005 as a result of higher quality corn from the 2005 harvest.

The group also said forward purchases of natural gas have protected it from the hurricane induced price spikes in the last quarter and will continue to eliminate energy price and cost uncertainty for the rest of the financial year.

Renova has entered into lease agreements for terminals in Denver, CO, and Fountain, CO, and these terminals are expected to be fully operational by the

end of March 2006. Renova now has 14 distribution terminals across its target

market.

The company has also completed the purchase of a 2 acre site in Fountain, CO, where its first owned terminal will be constructed and is expected to be operational by summer 2006.

At the company's Torrington plant the company's expansion project is now over 50 pct completed, although currently slightly behind schedule for the guaranteed completion date in June 2006.

Chairman Chris Thomas said the contractor is working closely with the construction sub-contractor to get the Torrington expansion back on schedule and at this stage the board does not expect a significant variation from the original project timeframe.

In the meantime, he said trading conditions remain favourable with high product prices and lower feedstock costs.

newsdesk@afxnews.com

Bush backing boosts Renova - BUY


George W Bush is not noted for according a high political priority to environmental issues. But the American President makes an exception in the case of ethanol, which is produced as an alcohol derivative from grain and sugar, and can be easily blended with petrol to reduce carbon emissions from motor vehicles.

By promoting the use of ethanol, the US administration scores points with the green lobby for helping reduce emissions and with mid-western, Republican-voting farmers for providing them with an extra source of revenue. The new US Energy Policy Act sets out to increase the compulsory use of renewable fuels in motor fuels from four billion gallons a year to 7.5 billion gallons by 2012.

Few are cheering louder than Chris Thomas and Fanton Chuck, respectively founding chairman and chief executive officer of Renova Energy, the London-based company which supplies ethanol for motor fuel in the Rocky Mountain states. Floated on AIM in June with a 7 million fundraising at 69p by broker Bell Lawrie, Renova has seen its shares surge on the back of an expansion programme that sees the company increase its annual production from six million to 100 million gallons within five years.

Chuck, 42, a former head of Asia Pacific energy for Deutsche Bank, holds 26.4 per cent of Renova, which was originally spawned by another company, Melrose Resources, to exploit ethanol potential. Chairman Thomas, 43, with 10.5 per cent of Renova, has been running Melroses US operations for seven years and is unequivocal in his reaction to the US legislation.

The ethanol industry in the US has been growing at an unprecedented rate in the last few years and this new legislation provides added stimulus to Renovas growth, he enthuses. The company, whose operations are based in Wyoming, negotiates annual supply contracts from local farmers and provides a distribution network in the area seen as constituting a significant entry barrier to would-be competitors for retailers, who can obtain a 51 cents (30p) a gallon sales tax rebate for blending it with standard petrol.

At present, ethanol is typically mixed with petrol in a ten per cent blend, though modern flexible fuel vehicles can take an 85 per cent blend, and Thomas says a 30 per cent ethanol blend requires no engine modifications and is a competitively-priced product. He also claims significant economies of scale, facilitating the hefty capacity increases he plans.

Renova, which turned a near-500,000 loss into a 32,000 pre-tax profit in the year to March 2004, expects to report pre-tax profits of around 420,000 for 2004-05. Bell Lawrie sees consolidation in the current year depressing profits to 190,000 in 2005-06, but predicts a surge to 2.6 million pre-tax next year on turnover more than doubling to 15.5 million, with further dramatic gains in 2007-08 and 2008-09.

RVA is 233p now...


Alternative fuels

The Renewable Fuels Standard (RFS)

The Renewable Fuels Standard (RFS) is a policy that would require an increasing amount of renewable fuels to be used each year. The RFS in the recently passed federal energy bill would slate 7.5 billion gallons of ethanol to be used in the U.S. by 2012. In 2004, the U.S. used 3.4 billion gallons of ethanol.
The RFS would streamline the current patchwork of fuel regulations we have across this country. States, regions and in some cases cities have different fuel requirements, and the RFS would allow renewable fuels to be used where they make the most sense instead of forcing the production of all these boutique fuels.

look at this go?

r u in it, ellio?

Take your profits and run to GTL .

did just that a few weeks ago at 248p missed the top by 2 days on the way up but glad to change, more than doubled my holding in gtl even though its gone down once the plant comes online soon renova is going to look fairly small compared.
it annoys me when directors make new shares available to them and just select large investors, for half the market value. should make it for everyone fairs fair we all own part of the company

Great work miracles, if you got in low originally in RVA then you could easily double your money this year and more.
I should have had the foresight to do the same but Ive got a large chunk in GTL now so its just waiting time.
Also hoping that shares mag trades out RVA for GTL soon to show a little bit of tenacity in their green portfolio.

anyone any insight why rva is down today?

becuase GTL is the next big thing and Renova holders are beginning to realise it.

Not deramping but
Renova Results just out, comparing their ethanol production for six months at 2.4 MMgal and their M/Cap it does make GTL look cheap, Gtl on start up are going to produce 50MMgal rising to 100MMgal or am I missing some thing.

Average daily production from the old plant prior to decommissioning on 11 July
2006 was 13,721 gal/d (2005: 14,084 gal/d), which was equivalent to 100% of
name-plate capacity despite some disruption during this period due to ongoing
construction work. Following a shut-down period of 5 weeks whilst the final
tie-ins for the new plant were being completed, production from the new plant
commenced in August 2006. Average daily production during the start-up phase
through to 30 September 2006 was 20,403 gal/d. Total production for the six
month period was 2.4 MMgal (2005: 2.6 MMgal).

Running a spread of 15p at a sp of 107.5p does not help in this market. RVA will continue to slip.

anyone knows why what is going on with the sp today?

Maybe some bad news is imminent

Resistance is futile!!!

This is free, free falling

on the bounce today, after a large buy trade earlier this morning
on the chart could be a double bottom forming as Indicators are at oversold

+3p and now looking good on the bounce

I am cautious of RVA...its bounce is not as pronounced as its dippings.