EBOOM CAPITAL: Largest U.S. Biodiesel Plant Begins Production at 2,500 BPD
Shares in Syntroleum Corporation (NASDAQ: SYNM) declined only slightly yesterday (and recovered today) after the company reported another quarter of depressed financial results.
The share price might have fallen more had not investors received some good news with the bad: The company’s new biodiesel plant at Geismar, Louisiana, the largest commercial scale biodiesel facility in the United States, is now producing and selling biodiesel formulated as jet fuel to the United States Air Force Research Laboratory.
Other news: EnerNoc, Inc. (NASDAQ: ENOC), LDK Solar Co. Ltd. (NYSE: LDK), JA Solar Holdings Co. Ltd. (NYSE: JASO)
For months it looked like Syntroleum's new Geismar plant might be mothballed without any commercial production.
The $170 million plant was conceived by Syntroleum and its 50/50 joint venture partner Tyson Foods Inc. (NYSE: TSN) in 2007 and partially financed in late 2008 by $100 million of tax free bonds from a legacy fund established to help the Gulf region’s economy recover from Hurricane Katrina. When construction began the biodiesel industry was booming, but the sector came crashing down when federal tax incentives expired at the end of 2009.
The plant was completed in July 2010, but there was no word of any production until Syntroleum announced yesterday that the plant has actually been converting animal fats and waste restaurant grease into 2,500 barrels of biodiesel a day for more than a month and the rate of production is increasing.
Syntroleum’s announcement did not explain why it waited until Monday to disclose the commencement of commercial operations.
Tyson and Syntroleum officials said they remain hopeful that Congress will restore the $1 per gallon renewable diesel tax credit that expired in December 2009. They did not provide guidance on the Geimar plant’s economics with and without the $1 per gallon tax credit.
In its Q3 (nine months) ended September 30, 2010 financial results, Syntroleum reported a net loss of $3.88 million ($4.5 million for nine months) on revenues of $1.26 million ($6.79 million for nine months), compared with 2009’s net loss of $0.27 million (net income of $7.10 million for nine months) on revenue of $4.4 million ($26.29 million for nine months).
The company’s cash position at September 30, 2010 was $20.83 million, compared with $25 million at December 31, 2009. Syntroleum has invested $34.3 million in the joint venture with Tyson Foods as of September 30, 2010 and funded an additional $5.0 million in October, 2010.
Earnings reports
EnerNOC, Inc. (NASDAQ: ENOC) shares were down more than 11 percent in early trading today after reporting Q3 (ended September 30, 2010) financial results Monday.
LDK Solar Co., Ltd. (NYSE: LDK) shares were up more than 9 percent in early trading today after reporting Q3 (ended September 30, 2010) financial results Monday.
JA Solar Holdings Co. Ltd. (NYSE: JASO) shares were up slightly in early trading after reporting Q3 (ended September 30, 2010) financial results today.
Photo credit: Syntroleum/Dynamic Fuels
DISCLOSURE: The writer has no positions in, or professional connections with, these companies.
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