Rentech Signs Coal-to-Liquids Master License Agreement With DKRW Advanced Fuels
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DENVER, Jan. 17 /PRNewswire-FirstCall/ -- Rentech, Inc. (Amex: RTK)
announced today that it has signed a Master License Agreement (MLA) with DKRW
Advanced Fuels LLC (DKRW-AF), a wholly-owned subsidiary of DKRW Energy LLC,
headquartered in Houston, Texas, for the use of Rentech's patented and
proprietary Fischer-Tropsch (FT) coal-to-liquids (CTL) technology.
Concurrent with the signing of the MLA, DKRW-AF's wholly owned-subsidiary,
Medicine Bow Fuel & Power LLC (MBF&P), has signed an individual site license
for its proposed Medicine Bow Project in Medicine Bow, Wyoming. The first
phase of the project is being designed to produce 10,000 bpd of ultra-clean
fuels from Carbon Basin coal and 200 MW of co-produced electric power.
Ultimately, MBF&P intends to expand the CTL production capacity of the plant
to a total of 40,000 bpd. Rentech will receive a combination of payments for
license fees, catalyst sales and other technical service support at various
times throughout the term of the license. MBF&P has already entered into an
agreement with Arch Coal Inc. for the purchase of coal reserves and to act as
operator for a new mine sufficient to support up to seven million tons of coal
supply for the Medicine Bow project.
Under the terms of the MLA, Rentech will also be the exclusive FT
technology provider for all future DKRW-AF coal-to-liquids plants. DKRW-AF
will pay Rentech license fees and associated payments and will have the right
to produce up to 500,000 barrels per day using the Rentech Process Technology,
including the capacity from the Medicine Bow Project.
"This agreement represents a significant opportunity for the company and
the ability to showcase the potential of the technology on a licensing basis.
I would like to extend my appreciation to Claude C. Corkadel III, Rentech's
vice president of Strategic Programs, and his team for their work on this
agreement," stated Hunt Ramsbottom, Rentech's president and CEO.
"The signing of this licensing agreement is a milestone for Rentech and
domestic CTL development, and we appreciate DKRW-AF's vote of confidence in
choosing Rentech's CTL technology for this vital project.
"This is the company's first domestic CTL license application. It also
marks what we believe to be the kickoff of the full domestic implementation of
Rentech's mission to develop technology and commercial projects that transform
underutilized hydrocarbon resources, like coal, into valuable alternative
fuels, chemicals and power. It is important to note that if the United States
is going to address its energy situation in a serious manner, it is going to
require management teams with vision, like those at DKRW-AF and Rentech,
combining their expertise to strengthen America's energy future by developing
projects similar to Medicine Bow.
"Rentech now has multiple domestic CTL projects it is working on to
acquire, develop or license; and we believe this confirms Rentech as a leading
domestic provider of coal-to-liquids technology," concluded Mr. Ramsbottom.
Additionally, each company has received the option to invest in the other
entity. Rentech has an option to acquire up to 5% of DKRW-AF on the same
terms as all other equity investors at the time of financial close. Rentech
has granted DKRW-AF one eight-year warrant and will grant a second eight-year
warrant to acquire a total of three million shares of the company's common
stock. The first warrant for one million shares was issued upon the signing
of the various license agreements. The exercise price is $2.41, the volume
weighted average price of Rentech's common stock over the five-day period
prior to signing a non-binding Memorandum of Understanding on September 21,
2005. The second warrant for the remaining two million shares will be issued
upon MBF&P reaching financial close on the first phase of the Medicine Bow
Project. The exercise price for these shares will be set at that time.
Robert Kelly, president of DKRW-AF and MBF&P, stated, "We are convinced
that coal-to-liquids will play a major role in North America's energy future.
We believe that Rentech has the technology to make this vision a reality."
About DKRW Advanced Fuels LLC
DKRW Advanced Fuels LLC is engaged in developing and investing in projects
that utilize coal gasification technology, including coal-to-liquids,
methanation, and integrated coal gasification combined cycle power ("IGCC")
projects. Medicine Bow Fuel & Power LLC employs both coal-to-liquids and IGCC
technologies.
About Rentech, Inc.
Rentech, Inc., a Colorado corporation formed in 1981, develops technology
and projects to transform underutilized hydrocarbon resources into valuable
alternative fuels, clean chemicals and power. To execute this strategy it
utilizes its patented and proprietary Fischer-Tropsch gas-to-liquids/
coal-to-liquids process for conversion of synthesis gas made from natural gas,
coal and other solid or liquid carbon-bearing materials into clean burning,
ultra-low-sulfur and ultralow-aromatic fuels (beyond detectable limits),
naphtha, waxes, and fuel for fuel cells.
Safe Harbor
Certain information included in this report and other reports or materials
filed or to be filed by the company with the Securities and Exchange
Commission (as well as information included in oral statements or other
written statements made or to be made by the company or its management)
contain or will contain "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, Section 27A of
the Securities Act of 1933, as amended, and pursuant to the Private Securities
Litigation Reform Act of 1995. The forward-looking statements may relate to
financial results and plans for future business activities and are thus
prospective. The forward-looking statements are subject to risks,
uncertainties and other factors that could cause actual results to differ
materially from future results expressed or implied by the forward-looking
statements. They can be identified by the use of terminology such as "may,"
"will," "expect," "believe," "intend," "plan," "estimate," "anticipate,"
"should" and other comparable terms or the negative of them. You are
cautioned that, while forward-looking statements reflect our good faith belief
and best judgment based upon current information, they are not guarantees of
future performance and are subject to known and unknown risks and
uncertainties. Factors that could affect Rentech include, but are not limited
to, market conditions demand for Rentech's technologies and fuels; the
commercial success of Rentech's and its licensees' projects, none of which are
currently operating; the impact of competitors and their licensees, many of
whom have significantly more resources than Rentech or its licensees;
Rentech's and its licensees' (including MBF&P) ability to secure agreements
with potential developers or investors and our and their ability to obtain
financing necessary to execute the planned projects (including Medicine Bow);
a decision by development parties to move forward with a specific commercial
project that would license and utilize the Rentech Process technology; the
timing for completion and operation of Rentech's and its licensees' projects;
the performance of Rentech's and its licensees' technologies and products; and
the risk factors detailed from time to time in the company's periodic reports
and registration statements filed with the Securities and Exchange Commission.
Any forward-looking statements are made pursuant to the Private Securities
Litigation Reform Act of 1995, and thus are current only as of the date made.
For more information please contact: Mark Koenig, Director of Investor
Relations, Rentech, Inc. at 303-298-8008, extension 116, or by email at
mkir@rentk.com, or see the company's website at: rentechinc.com; or Kevin
Theiss, CEOcast, Inc. at 212-732-4300 or by email at ktheiss@ceocast.com.
SOURCE Rentech, Inc.
Web Site: rentechinc.com |
