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/

almost certainly soul - IMO only thing holding the S.P. back, that may sound good but It's a pretty serious problem for GTL.

Not if the company confirm they are operating on fixed prices and rough time span in a RNS. Annoying thing is this could be done now.

They may have bought the corn for a fixed price throughout next year but I doubt anyone has bought their foward output of ethanol and the price of ethanol is dropping relatively quickly.

Looks like Bush's speech is due very shortly.

Bush's Speech

Tomorrow looks promising after George Bush's State of the Union address tonight. BBC talking about strong push to use Ethanol.

In his first State of the Union address to a Democratic-controlled Congress,
President Bush is calling for Americans to slash gasoline consumption by up to
20 percent by 2017.
Bush envisions the goal being achieved primarily through a sharp escalation
in the amount of ethanol and other alternative fuels that the federal government
mandates must be produced. The rest would come from raising fuel economy
standards for passenger cars, Joel Kaplan, White House deputy chief of staff,
said in advance of Bush's Tuesday night speech to a joint session of Congress.
The president is proposing to set the amount of ethanol and other
alternative fuels to be blended into the fuel supply at 35 billion gallons by
2017, up from 7.5 billion gallons in 2012. He also wants to expand the standard
to include not just ethanol but a wide range of oil alternatives, such as
biodiesel, methanol, butanol and hydrogen, Kaplan said.
Though some argue that such a drastic increase is unrealistic, Kaplan said
the White House is banking on the new mandate -- which would need approval from
Congress -- spurring investments in the industry and giving technological
research a boost.
The other piece of Bush's energy proposal is something he has unsuccessfully
asked Congress for in the past -- the ability to rewrite mileage rules for new
car fleets. The White House calls it a safe way to improve car mileage, but some
critics suggest that it could instead spur automakers to produce more gas
guzzlers.
The Transportation Department already has revamped its the rules for
pickups, sport utility vehicles and minivans, setting a sliding mileage scale
that is based on a vehicle's size. The overall standard was increased slightly;
smaller vehicles now must meet higher mileage requirements than do larger ones.
The biggest SUVs were exempted until 2011.
Bush wants the same ability to reform mileage rules for passenger cars,
which today must meet a fleet average of 27.5 miles per gallon, a standard
unchanged in two decades. He would include a system of trading or "banking"
credits to meet new standards, Kaplan said.
In the 9 p.m. EST speech, the president goes before lawmakers with a
much-abbreviated topic list, hoping to capture the public's attention at a time
when 2008 presidential contenders and Capitol Hill's new Democratic leaders
present fierce competition. So he is dangling new and recycled ideas before
lawmakers in four key areas -- energy, education, immigration and health care.
With debate over the Iraq war sending Republicans scurrying away from the
president and his job approval rating hovering in the mid-30 percent range,
Bush's overall agenda was twofold: present himself as a leader with a sincere
desire to work across party lines and pressure on Democratic leaders to either
go along or offer alternatives.
The White House has promised the president will be bold. But spiraling war
expenses and huge federal deficits preclude anything too costly.
But the cold reception that Bush's ideas on health care received on Capitol
Hill in the days ahead of the speech offered a striking reminder of the
difficulty he faces in the new climate.
The president is proposing to change to how the tax code treats health
insurance, by counting employer contributions toward health insurance as taxable
income while establishing a standard deduction for anyone with insurance. The
White House says it would introduce increased market forces to the health care
industry and make coverage more affordable for the uninsured. Aides estimated
the plan would represent a tax increase for only about 20 percent of
employer-covered workers.
Rep. Pete Stark, D-Calif., chairman of a key health subcommittee in the
House, said he would not even consider holding hearings on the proposal. He
dismissed it as a dead-on-arrival attempt to encourage employers to stop
offering health insurance.
"You can assume a lot of people are going to do the old 'it's dead on
arrival,' " White House press secretary Tony Snow said. "It's not. This is a
proposal that's going to make health care cheaper for 100 million Americans or
more."
On Iraq, Bush was not expected to rehash the speech he gave less than two
weeks ago laying out his revamped war plan, the centerpiece of which is a
21,500-troop increase in the U.S. military presence. Instead, he was to broadly
defend his stand that Iraq is part of a war on terror that will make Americans
safer.
Democrats scheduled freshman Sen. Jim Webb, D-Va. a Vietnam war veteran who
opposed Bush's invasion of Iraq, to deliver their party's televised response to
the president.
"They don't have a plan," Webb said in a preview of his remarks. "What they
have put on the table is more a tactical adjustment."
On Capitol Hill, the pushback from congressional Republicans to the troop
increase grew -- even on the speech drew near.
Three GOP senators and one moderate Democrat unveiled nonbinding legislation
expressing disagreement with the plan and urging Bush to consider "all options
and alternatives."
"We've had four other surges since we first went into Iraq," said Sen. Susan
Collins, R-Maine, one of the sponsors. "None of them produced a long-lasting
change in the situation on the ground."
In the House, members of the GOP leadership drafted a series of what they
called "strategic benchmarks" and said the White House should submit monthly
reports to Congress measuring the Iraqi government's progress in meeting them.
Meanwhile, majority Democrats intend to hold votes within days in the House
and Senate on tougher bills declaring that the troop increase is "not in the
national interest."
In other areas the president is expected to address:
--Health care. Bush will propose a tax deduction of $7,500 for individuals
and $15,000 for families regardless of whether they buy their own health
insurance or receive medical coverage at work. He also would subject
employer-sponsored health care benefits to taxation, meaning those with policies
worth more than the deduction would see a tax hike. But those who get policies
at work worth less than the deduction, the preponderance of workers with
employer-provided insurance, would get a tax break. Another proposal would give
some federal money now going to hospitals and other facilities to states for
programs to reduce the number of uninsured.
--Education. Bush will push for Congress to renew his education
accountability law, No Child Left Behind, which expires this year.
--Immigration. Bush will again push for comprehensive reform that goes
beyond tougher border security.

STOCKS NEWS US-Ethanol stocks up before State of the Union
Tue Jan 23, 2007 6:57 PM GMT

Stocks on the move [HOT-RTRS] Real-time Equity news [U E] [RESF/US]

U.S. stock market report [.N] 1349 ET 23Jan2007 -Ethanol stocks jump ahead of Bush's State of the Union ------------------------------------------------------------------------------

Shares of ethanol producers were trading sharply higher ahead of U.S. President George W. Bush's State of the Union annual address, which is expected to call for expanded use of the clean fuel.

Bush's annual speech to Congress on Tuesday could call for up to 60 billion gallons of ethanol -- produced mostly from corn in the United States -- and biodiesel annually by 2030, according to a source briefed by the White House.


Shares of Aventine Renewable Energy Holdings Inc. (AVR.N: Quote, Profile , Research) were up 1.6 percent to $20.12. Archer Daniels Midland Co. (ADM.N: Quote, Profile , Research) stock gained 3.1 percent to $32.81, Pacific Ethanol Inc. (PEIX.O: Quote, Profile , Research) shares were up 8.8 percent to $18.28 and VeraSun Energy Corp. (VSE.N: Quote, Profile , Research) stock added 3.3 percent to $18.44.

Nicely timed RNS:

GTL Resources PLC
24 January 2007


For Immediate Release 24 January 2007



GTL Resources plc

('GTL' or the 'Company')

Acceptance Tests complete and first revenue announced


GTL Resources plc (AIM:GTL), the project development company focused on Ethanol
production in the US, is pleased to announce that its ethanol plant at Rochelle,
Illinois USA, which commenced production on 27 December, has completed its
acceptance tests on 16th January and has received its first revenues.


The acceptance tests, which check that the plant is capable of meeting
production expectations, were completed over the period 10th to 16th January,
during which time the plant on average exceeded the:


Nameplate capacity of 50 million gallons per annum

Guaranteed ethanol yield equivalent to 2.8 denatured gallons per bushel of
corn

Guaranteed electricity and gas usages per gallon of ethanol


The plant is now being operated by Illinois River Energy (GTL's 85% owned US
subsidiary) staff following handover by the technology providers ICM and the
contractor Fagen Inc.


All production since 27th December has met quality specifications and ethanol
shipments to both the local Chicago market by truck and the New York market by
rail are proceeding to plan. Dried Distillers Grains shipments to the rapidly
expanding Far Eastern market have also commenced with attractive margins being
achieved as a result of the plant's proximity to Chicago container terminals.


The landmark receipt of the Group's first $1million of revenue was achieved on
12th January. The plant is operating profitably and its continued ability to do
so will be assisted by risk management activities. These include the use of
financial derivatives by means of which the company has limited its corn price
exposure on 95% of its nameplate corn usage for calendar 2007. At a hypothetical
$4/bushel corn for 2007 the benefits of these hedging activities would exceed
50cents/bushel with a limited exposure to higher prices outweighed by a greater
downside participation potential.


Peter Middleton, GTL's Chairman and CEO, said

'We are very excited about the completion of our first ethanol plant, and are
particularly pleased that it was achieved on schedule and to budget. Despite
current oil and corn volatility, production remains profitable. The outlook
remains strong for well managed and well located plants such as ours at
Rochelle.'

GTL producing and selling ethanol, selling bi-products and have hedged corn price for 2007. All under control, revenues coming in, on track! :-)

The Times

Tiddler to watch

The renewable energy group GTL Resources climbed 1p to 190p on hopes that its first ethanol plant passed acceptance tests and has started to generate revenues. Inspectors visited the facility in Rochelle, Illinois, last week to guarantee that it matched quality criteria. Their green light would mean the plant could become profitable immediately, analysts said.

Here we go

GTL Resources plc (AIM:GTL), the project development company focused on Ethanol
production in the US, is pleased to announce that its ethanol plant at Rochelle,
Illinois USA, which commenced production on 27 December, has completed its
acceptance tests on 16th January and has received its first revenues.

http://moneyam.uk-wire.com/cgi-bin/articles/200701240700440335Q.html

Morning all! Here's the full text from the RNS:

GTL Resources PLC - Operation Update
RNS Number:0335Q
GTL Resources PLC
24 January 2007


For Immediate Release 24 January 2007


GTL Resources plc

('GTL' or the 'Company')

Acceptance Tests complete and first revenue announced


GTL Resources plc (AIM:GTL), the project development company focused on Ethanol
production in the US, is pleased to announce that its ethanol plant at Rochelle,
Illinois USA, which commenced production on 27 December, has completed its
acceptance tests on 16th January and has received its first revenues.


The acceptance tests, which check that the plant is capable of meeting
production expectations, were completed over the period 10th to 16th January,
during which time the plant on average exceeded the:


* Nameplate capacity of 50 million gallons per annum

* Guaranteed ethanol yield equivalent to 2.8 denatured gallons per bushel of
corn

* Guaranteed electricity and gas usages per gallon of ethanol


The plant is now being operated by Illinois River Energy (GTL's 85% owned US
subsidiary) staff following handover by the technology providers ICM and the
contractor Fagen Inc.


All production since 27th December has met quality specifications and ethanol
shipments to both the local Chicago market by truck and the New York market by
rail are proceeding to plan. Dried Distillers Grains shipments to the rapidly
expanding Far Eastern market have also commenced with attractive margins being
achieved as a result of the plant's proximity to Chicago container terminals.


The landmark receipt of the Group's first $1million of revenue was achieved on
12th January. The plant is operating profitably and its continued ability to do
so will be assisted by risk management activities. These include the use of
financial derivatives by means of which the company has limited its corn price
exposure on 95% of its nameplate corn usage for calendar 2007. At a hypothetical
$4/bushel corn for 2007 the benefits of these hedging activities would exceed
50cents/bushel with a limited exposure to higher prices outweighed by a greater
downside participation potential.


Peter Middleton, GTL's Chairman and CEO, said

'We are very excited about the completion of our first ethanol plant, and are
particularly pleased that it was achieved on schedule and to budget. Despite
current oil and corn volatility, production remains profitable. The outlook
remains strong for well managed and well located plants such as ours at
Rochelle.'


For further information, please contact:

GTL Resources plc
Peter Middleton, Executive Chairman Tel: 020 7958 1685
Michael Brennan, Finance Director Tel: 01642 794 000

Buchanan Communications
Tim Thompson Tel: 020 7466 5000
Nick Melson


This information is provided by RNS
The company news service from the London Stock Exchange

END

Hey I know it's exciting but one thread link and two full copies of the RNS is enough even today.

Yes laurie, things looking good :)

So if the IRE plant gets 2.8 gallons ethanol per bushel of corn:

Assume ethanol price sinks to $1.8 per gallon: 1.8 x 2.8 = 5.04.

Sutract cost of corn $4 per bushel = $1.04 gross profit per bushel.

Work that back to profits per gallon of ethanol, i.e. divide by 2.8 and you get: 37 cents per gallon of ethanol.

0.37 x 50 million = $18.5 million gross profit (on turnover of $90 million).

I'd hate to hazard a guess at the running and admin costs; smaller company RVA seems to cost about $3.6 mil a year. Call it $6.5 for IRE?

Leaves $12 mil pre-tax. That's 6 mil, and about 4.6 mil after tax. Of which GTL owns an 85% share, which is 3.9

At SP 214p, you have a market cap of 49 mil, for a current PE of 12.56.

This is all just wild theory; I'm certain the analysts will soon be making some far more concrete predicitons, but at present I guess the current SP is fair or possibly even a little on the cheap side.

As long as the ethanol price doesn't keep sliding!! Atleast it seems to have picked up slightly in the last few days and the corn price has also stabilised slightly too, if the charts are to be believed.

All IMO, DYOR - if anyone thinks I'm talking misleading nonsense they are welcome to put me straight, but at least I feel I might have got a handle on the numbers at long last.

Its the big day though Laurie - There's actually been a positive movement in GTL's SP!!!!!!!!!

Sorry Laurie. However, I have so much excitement going on here in Frankfurt that I am wetting my little (German) panties with glee.

GD Potts - LOL, I was thinking exactly the same thing! My portfolio has looked so bleak recently, it's just not true.

Nice calculations Soul, I'm positive for the future - Bush's speech should help drive up Ethanol prices and the board seem to know what they are doing at GTL, unlike a fair few other AIM companies.

Also on the homepage on MoneyAM as 4th / 3rd biggest riser today!