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/

Or circumcised!


A slight nudge up today, on meagre turnover of 10K shares:

GTL Bid: 195p Offer: 210p Change: 5

hopefully the start of a gradual - explosive rise before the plant opens!

New 8/12/2006

Ethanol plant on track for end of year

The facility near Rochelle is taking shipments of corn to build up its supply for production.By Nate Legue ROCKFORD REGISTER

The Rock River Valleys second ethanol plant might be operational before the end of the year, its top official said Thursday.Illinois River Energy LLC has been building an $80 million facility in Rochelle capable of pumping out 50 million gallons a year of the corn-based fuel additive, and contractors are working on the last touches to finish it, said President Floyd Schultz.Im not going to guarantee its going to happen, but everythings running along as it should be, Schultz said.

The massive still, which turns corn into ethanol through a process like making moonshine, began taking shipments of corn two weeks ago to slowly build up its supply before production begins.Since the Energy Policy Act of 2005 mandated nearly doubling U.S. ethanol production by 2012, capital investment has flowed into new ethanol plants with invest-ors eager to reap the benefits of state and federal tax breaks.Two more facilities one southwest of Rockford and another in Stillman Valley have been proposed in the region in the last year. Last month, Wisconsin-based Global Renewable LLC proposed a $195 million plant in Sharon, Wis., a small town north of Capron. Right now, the only running ethanol plant in northern Illinois is in Lena.The gold rush fever infected Illinois River too. The plant, which was conceived before the energy act, is now seeking an environmental permit to double its size.

Were not trying to get ahead of anything, Schultz said. The economics show us too, thats its not a bad idea to go ahead and expand.Previous reports that the plant would go on line Dec. 4 were not correct, Schultz said. Fagan Inc., the plants builder, is not required to finish this month, he said.

http://www.rrstar.com/apps/pbcs.dll/article?AID=/20061208/BUSINESS04/112080024

G D Potts

Nice letter in share mag this week.

Agree with all points raised. GTL price will reflect it's value in time.

I was hoping some one had posted this today because I don't no much of what was said cause I was at work. On sky News this morning there was an five minute article all about U.S Ethanol and guess what plant they showed yours truly GTL they filmed the plant being built from a helicopter with the scrolling words underneath on screen Illinois River Energys new plant if any one else saw it please post what was said. This could explain the small rise today.

Spitfire any chance of bulleted points from 702?

Driver great post 701 the dollar rate is going to help further as well after GOO needed some good news.

Laurie, could you please explain to a confused banker how the dollar rate is going to help?

Laurie Squash

The letter was from G D Potts and just making the points about GTL over Renova made on this thread. Like Renova having 60 million market valuation and only 5 million gallons ethanol production, against GTL 54 million market valuation and soon to produce 50 million gallon production.

And asking why they haven't swapped the shares over in the green portfolio.

Shares pointed out that Renova had gained 19% since inclusion, and GTL had fallen 24% over same period.

Which is a fair point, I believe GTL may be included in the portfolio but only when they have more good news on the production front, and they start to break out of the present trading range. But who knows.

Soul traders purchase price of corn from sterling so better price and company bases accounts in sterling.
Yet funding help for plant was in dollars so no exchange loss.

Driver, re your post 703, I have just caught the end of a similar programme about US alternative fuels, including the Illinois River Energy new plant on BBC World. The interviewee (didn't catch his name) reiterated their desire to double the capacity of the plant, once up and running. I think he said from 50 to 100 Million gallons, which fits with previous info. It's repeated every few hours and is probably broadcast to all regions around the globe. Maybe will catch another part at the next 'showing'. A nice bit of free advertising for all GTL holders, well done BBC !

Darradev
Cheers as you say a nice bit of free advertising, could have been the reason for the sp rise on Friday to those that knew Illinois River Energys plant was 85% GTL's

Here are a couple of calculations to get your teeth into from another board courtesy of deka1 and charlie while we are waiting for start up.


deka1
I am thinking of getting into these and have done my research on the comp/ business , and using the crush margin to get operating cash flow and a forward rating of 10 and a discount factor of 10% i came up with a share price of 9 ,and thats taking into account 40mil start up costs

Crush margin 2.33usd/gal prod 50mil gals=116mil operating cash flow -taxes etc at 30% =76milusd x a forward rating of 10 (i think this is reasonable)=760milusd - discount factor of 10%about 228mil =532 mil - 40 start up cost around 490 mil / 24 mil shares =sp $19 or about 9 all imo


charlie

PEIX sp is $40 once.....they have 5 X 50 m gal plants are valued at over a billion dollars....that's 200 million per plant. Against it's peer PEIX....one 50 m gallon plant equals 1/5th of Peix's valuation of 1 billion$.

$200m divided by 22 million equals $9 divided by 2....share price of 4.50.

20 million dollars profit should if you use a multiplier of 20
which I would be comfortable with, on a buyout, produce a sale price
of 400 million$ $400m divided by 22 million shares......$18 ...divided by 2.....9.

Thanks spitfire - I was making the recommendation that they now swap GTL for RVA but Susanna Twidale seemed to take it differently and made the point about the difference in the S.P's performance.
The fall in GTL's price and rise in Renova's is further strength to swapping them!

GDP, Shares Mag will want to see evidence of a change in the trend first -wait for the RNS's to come through and then maybe you'll see Shares make that recommendation.


Laurie, I'm still not convinced. The IRE plant will not be paying sterling for its corn, at least not in the long run, even if some of the flotation money went into purchasing intial supplies. The system will ultimately be a "closed" dollar system, operating in the USA, buying corn in dollars, selling ethanol in dollars and only reporting GTL's stake in pounds.

Don't forget that due to GTL holding an 85% stake in IRE (the true legal owner of the ethanol plant), the whole of the accounting for the ethanol plant is bascially taking place in an off-balance sheet vehicle, so I'd be careful about what I made out of the numbers reported in GTL's financial results; you'd need to see IRE's figures to get the whole pictre.

Additionally IRE is a farmers' collective - not sure what implications this could have, apart from the obvious fact that IRE has created for itself a system that ensure both supply and demand, but it is a different dimension from just having GTL own the plant and buy its corn direct from the market.

EDIT: It could be a little bit of a case of swings and roundabouts with the currency, as weaker dollar prices may cause a compensatory increase across the board in commodity prices, but I'm just wary of making too broad a statement about the situation.

Crop Report out today says that corn is currently fetching $3.30 a bushel.

I thought that GTL had commented somewhere on corn prices but am unable to find the quote.

st
They have a deal

October 3, 2005
ROCHELLE, Ill. Illinois River Energy LLC announced today it has signed an exclusive agreement with Cargill for corn origination, energy and price risk management services for a 50-million-gallon-per-year ethanol plant being built here. The corn will be purchased from farmers and country elevators in Illinois and surrounding states, and supplied by the Cargill AgHorizons Northern Illinois Farm Service Group.

Dirver, thanks for the reminder. I knew they were hedged/forward contracted, but seem to remember that GTL had also quoted a price per bushel and said that they were still comfortably profitable.

so this one could still take the biofuels corp. road?
remeber the hedging disaster?

the group they are buying the corn from are somit to do with the other 10 % of the company are they not

or have i read to much between lines