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/

Only one mm is holding the sp back so fingers crossed for 2.30p today still.

That would be very nice, but gut feeling tells me that the fund managers will need a few more days to run their slide rules over this one before we see much more institutional buying.

Soul - Liked your calculation (Post 921), but just had a quick tinker with the figures myself.

Take into account the following extract from the last RNS:

.... 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 ....

I take this to mean that 95% of their corn is purchased at $3.50 per bushel and the other 5% at $4. This gives an average corn price of $3.525 per bushel.

Lets see now how that affects your figures. Using your calculation as a template:

.....................

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 $3.525 per bushel = $1.515 gross profit per bushel.

Work that back to profits per gallon of ethanol, i.e. divide by 2.8 and you get: 54 cents per gallon of ethanol.

0.54 x 50 million = $27 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 $20.5 mil pre-tax. That's 10.35 mil, and about 8.28 mil after tax. Of which GTL owns an 85% share, which is 7 mil

..........................

For 22.7 million shares in issue and current SP at 213.5p (at time of posting) gives a market cap of 49 mil, leading to a PE of 7.


By comparison, Renova has a market cap of 49 mil, SP at 170p and a PE of 80.

If the market is happy with Renova having such a high PE, the implication is that GTL ought to be allowed a comparable PE suggesting a large increase in the current SP. Blimey!!!

Well that was a hectic day for GTL -
Great news that the plant has surpassed its capacity (Although seems a bit odd that it can produce more than its supposed to....)
Already selling contracts for its output and the rising corn price has been accounted for - hopefully by next year they ll be more farmers producing it - making ti cheaper as a result - More profit for GTL
Fantastic speech from the man should help boost investor and institutional faith in the sector and GTL as a result.
Then hopefully Shares can stomach their mistake, re-print their faulty report last week and give them a positive run down.

Thanks for the mention Spitfire - Well they've already put Ceramic in, all be it late and not for Ceres but at least they listened.
Maybe GTL will be next.

StarFrog, I think you could be onto something. Silly me - I'm not very well acquainted with the language of hedging. It seems you're right - 95% is purchased at $3.50 or better, while the rest will be purchased at market prices.

not sure if we'll manage a PE of 80, but say we got PE 14, times 7 mil net earnings, equals 98 mill mkt cap, or a doubling of the current SP (to around 430p).

Not bad, and with room for more growth as market conditions improve or extra capactiy comes on stream.

Let's hope the analysts agree with us and start publishing their findings!!

Okay, brain hurts now, time to switch off PC and go eat something. Night-night everyone! :o)

StarFrog, soul
Well done on the numbers I think we all agree that the sp looks a bit small any thing up to 650p in the short term and more with the doubling of production and who knows with more plants in the future. Im aloud to ramp Im the driver.

Revenues at last for GTL - GCI
Companies: GTL
24/01/2007
GTL Resources, the AIM-quoted US ethanol fuel production company, has received its first $1 million (500,000) of revenue.

Chaired by former monk, Lloyd's insurance chief and banker Peter Middleton, GTL says its first ethanol plant, at Rochelle, Illinois, began producing on 27 December, completed its customer acceptance tests on 16 January and has since received its first revenues. According to GTL, the tests confirmed that the new Rochelle plant, operated by the company's 85 per cent-owned Illinois River Energy, had a capacity of more than 50 million gallons a year, with a guaranteed ethanol yield equivalent to 2.8 gallons per bushel of corn (supplied by farmers whose incomes and votes are important to US politicians).

GTL says Rochelle is operating profitably, helped by the use of commodity market derivatives. Middleton argues the current outlook 'remains strong'.

GTL investors have had a switchback ride, hitting 10.50p in May 2004 and plunging to 98.8p a year later. They have since rallied to 212.5p, up 22.5p today and valuing the company at 48.23 million, and should offer more potential mileage

Tom W of T1ps re-iterated his buy recommendation on GTL at 212.5p, yesterday.

Driver - the fact that the co is run by a former monk makes sense - they have always known a thing or two about brewing and distilling :o))

good thing is he'll always be working and rarely step outside!

soul
Now I wonder if I can make ethanol the same way?

Now let's stop monkying around. I wonder if he's hedged with God too!

Pleased that GTL managed to recover late in the day today to no change, would have been dissapointing if after all the positives of yesterday they closed down.

GDP, I think people are looking for a little bit more proof at the moment - profits in the next financials would be good.

Expect some analysts' reports to start trickling out in the next few weeks too - I hope, as I think that may help instiutions to get focussed.

New annoucement today, hopefully a sign of more interest.

In accordance with the Transparency Directive new disclosure thresholds,
Cazenove Capital Management Ltd announces that it holds 1,377,049 ordinary
shares in GTL Resources Plc. This represents 6.07% of the shares in issue. The
interest arises as a result of Cazenove Capital Management Limited managing
these shares as an authorised investment manager.

That looks like a good sign that some of the "riskier" fund managers are getting on board.

When JPMorgan, Barclays Global and UBS start making announcments, then we should have a multi-bagger on our hands :o)

And you think the likes of JP Morgan, Barclays and UBS will get on board soul??

ghjones2
Yes and old John colby and all.

Oil rises above $55 a barrel
MoneyAM
Oil prices rose above $55 a barrel Friday, buoyed by blustery weather in the northeastern U.S. and on expectations that OPEC will cut production as promised.

Light, sweet crude for March delivery on the New York Mercantile Exchange rose 81 cents to $55.04 a barrel in morning trading in New York. Brent crude rose 68 cents to $54.80 a barrel on the ICE Futures exchange in London.

'The market is thinking that OPEC compliance will be better as we go forward,' said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. 'Oil is looking very strong.'

The Organization of Petroleum Exporting Countries said it would begin cutting production by 1.2 million barrels a day in November, but some traders speculate members are not complying. The cartel said late last year it planned to cut production another 500,000 barrels a day starting Feb. 1.

Tanker tracker Oil Movements reported Thursday that it expects exports from OPEC to rise in mid-February. The news sent oil prices down to settle at $54.23 Thursday after rising as high as $55.90 during earlier trading.

The market has since shrugged off the report, Flynn said, and has refocused on comments earlier this week from ConocoPhillips that made traders believe OPEC is going through with its production cuts.

On Wednesday, ConocoPhillips' Chief Executive Jim Mulva said that the company was firmly instructed to curb output in its Libya and Venezuela operations.

Victor Shum, energy analyst with Purvin & Gertz in Singapore, also pointed out that prices are being propped up by continued cold weather in the U.S. and the announcement Tuesday by the U.S. government to double the size of its Strategic Petroleum Reserve.

'If you look at trading this week, the market has found some support above the $50-a-barrel price mark. It appears to have found a floor due to a number of factors,' Shum said.

Earlier this month, crude fell to $50 a barrel, but it rose about 10 percent over the past week as cold weather gripped the northeastern United States, a major consumer of heating oil.