Syntroleum in shake-up
tulsaworld.com
By JASON WOMACK World Staff Writer
11/20/2007
Founder Kenneth L. Agee resigns as the company shifts its focus.
Tulsa-based Syntroleum Corp. announced senior-level management changes and job cuts Monday, citing a plan to improve its performance.
The plan represents a shift for Syntroleum -- a move from its focus on research and development to becoming a profit-driven company.
Syntroleum said it will reduce its work force to 22 by the end of the year and eliminate its lab facilities. The company currently employs about 38 people.
Kenneth L. Agee, founder, chairman and chief research officer, resigned his positions and is in negotiations to purchase the lab facilities, the company said.
"Now that Syntroleum has reached the point of commercialization, the time is right for me to move on and pursue other interests," Agee said during a company conference call. "I am looking forward to furthering my other research and development interests."
Syntroleum developed and owns a process to convert gas derived from biomass, coal natural gas and other carbon-based feedstocks into liquid hydrocarbons.
It also has developed a process for turning
animal fat and vegetable oil into renewable diesel and jet fuel.
In June, Syntroleum and Springdale Ark.-based Tyson Foods Inc. formed Dynamic Fuels LLC, a joint venture that plans to build and operate multiple synthetic fuel facilities. Tyson -- the world's largest processor of chicken, beef and pork - will provide the feedstocks for fuel production.
Dynamic Fuels' first plant is scheduled to begin production in 2010 at a site in Geismar, La. The planned $135 million facility would have a production capacity of 5,000 barrels per day.
Syntroleum CEO John B. Holmes Jr. also announced his departure from the company Monday. He said the announced changes "will alter the future of the company and assure a positive cash flow by 2010."
Edward G. Roth, who previously served as Syntroleum's chief operating officer, will replace Holmes as CEO.
The company's board members elected director Robert B. Rosene as chairman.
Founded in 1984, publicly traded Syntroleum has never made a profit.
Karen Gallagher, principal financial officer and senior vice president, said Syntroleum has eliminated more than 100 jobs since 2006.
Many technical posts, including chemists and lab techs, were associated with company projects, and those jobs were eliminated when the projects were completed, she said.
Last year, Syntroleum closed a gas-to-liquids demonstration plant at the Tulsa Port of Catoosa and a pilot plant, cutting 46 jobs.
"We are becoming an operating company," Gallagher said. "We don't need that class of employees anymore."
Syntroleum said it will still be staffed primarily by technical and engineering employees who will be involved in the Dynamic Fuels plant design.
Syntroleum also announced Monday that it has secured $12 million in equity financing from an affiliate of Fletcher Asset Management Inc.
Fletcher, a New York-based investment company, will purchase $12 million worth of Syntroleum common stock over the next 24 months. The first purchase, worth $3 million, will be made in the next six months, according to the agreement.
Shares of Syntroleum fell 3 cents Monday to close at $1.46.
Jake Dollarhide, CEO of Longbow Asset Management Co. in Tulsa, said Syntroleum has great potential but has not had many successes.
"When you're trading around a $1.40 a share, it's not by accident," he said.
Jason Womack 581-8380
jason.womack@tulsaworld.com
Syntroleum Corp. since 1984
1984: Kenneth L. Agee founds Syntroleum Corp. in Tulsa.
1998: Syntroleum merges with Kansas City, Mo.-based SLH Corp, allowing the Tulsa-based company to begin trading on the Nadaq stock exchange.
2002: Syntroleum breaks ground on a $36 million synthetic fuels plant at the Tulsa Port of Catoosa.
2006: Syntroleum closes plants in Tulsa and Catoosa, eliminating a third of its Tulsa area work force.
June 2007: Syntroleum and Tyson Foods Inc. launch a joint venture, Dynamic Fuels LLC.
Last Thursday: Syntroleum announces that Geismar, La., will be the site of the first Dynamic Fuels plant.
Monday: Syntroleum announces management changes and plans to cut jobs as the company shifts from a focus on research and development to becoming a profit-driven firm. |
