Does any one know of Sterling Group ??
Are they kosher ??
They sound like a wanna be UK British proper gentry stuff off Mayfair.
Still they are endorsing RNTK.
Lets call them and check them out with Better Business Bureau and SEC.
Read on ..
It was a fax that I had to scan so its all messy..
@--97 -TU@ 15 7
-S T E R L I Ml G
iNVE-9TMENT SERVICES. Inc.
mvw.stertinginvestments.com
sterlinginvestments.com
The opinions expressed in this rwrt am those of the author and am not nma$&My the same as those of RAF nt P,/'@lthe preparati(-. to its accurucy preparation.
SMALL CAP. RESEARCH REPORT
a nterest in, or
BUY Recomineadation
D&ember 1, 1997
Rentech, Inc. (N ASDAQ: RNTK)
www.g@toliquids.com
Cort).orate Info. Market Info.
Rentecb, Inc. Share Outstanding: 25 million
1331 17" Street Estimated Float: 14 million
Suite 9 720 Re@t Price- $0.96/share
Donvor, Go, 60202 Average Daily Trading Vol.: 668,000 shares
(303)-298-8008
ComRany Descril2tion:
Rentech owns and licenses a patented and proprietary technology that convert$ gascs into liquid urrently only 3 other conip@es in the hydrocarbons including diesel fuel, napthas, and waxes, There are c
:e companies are Shell, E?mon, and SASOL (the South
world with proven commercial capabiH6e@,, The
ach's patented technology uses an iron catalyst in its process, Iron has
Afiican Synthetic Oil Co.) Rent
several advantages including a lower cost and the ability to work with a wider variety of gases- This rnakes
have proved this
Rentech's patented process superior to the competitions. Of the four companies that
hnolosy to other technology, Rentech is the only one that is open to licensing their proprietary tec
companies in the oil & gas arena. Rentech is currently in too with Texaro over negotiations to speed the development and implementation of these processes on a worldwide basis.
History of the Technology:
ss of converting a cas, such as -na@ gas, to a @quid was originally developed in the 1920 by n scientist Fraaz Fischer and Hans Tropsch, During World War TI the G-errnan government d several plants utili,ing this process to provide fuel and other chemicals during the war. These
plants were shut down after the war when cheaper petrochemicals imported from other countries made these plants uneconomical to operate.
Texaco began the operation of a plant using this technology in 1950 in an attempt to further develop th technology. Texaco introduced into the process metal catalyst to make the re8ning more economically efficient. This plant closed in 1953 for economic reasons,
In 1955 the South African National Energy Comniission completed its first plant SASOL I. Ms plant and two new ones are successfully operating today.
Apt)lications of the Technology:
The main appecation of this technology is in the process natural gas that is a by product of the oil re@g business. Wat"al gas that is currently being burned off can be converted profitably into diesel and other petroleum products that can be sold on the market. Rentech is currently reconstructing its plant in the Kumchai field in Northwest India. The plant is scheduled to be& production in mid 1998. The plant has the capacity to process 360 bazrels per day offischer Tropsch Waxes. At a price of $166/barrel for the wax this plant could generate annual revenues'of $21.8 nimon. Rentech wiU receive approximately $1/dailybarrelofproduction. T4additiontheplantwiUproduceothercommercialproductsforWe.
Recent Devel ents-
Rentech has recently entered into talks with Texaco concerning Texaco's possible licensing of Rentech's technology. I view the potential licensing agreement as a very positive development. This would supply ReLitech with a steady stream of revenue and boost the profitabiety of the company. Considering Texaco'S past involvement with a gas to Equids facility in the 1950's I feet there is a very sofid chance that they will be able to come to an agreement on licensing rights.
Rentech has sig;ied agreements for two additional plants to be constructed in India,
Other Holdin s
Okor4 Inc. is a whouy owned subsidiary of the Rentech, Inc. This company manufactures and distributes environmentally clean , water repellent s@ous and staffis for wood, concrete, and masonry. This subsidiary had approximately $2.0 Eon in revenue f6r 1996-
ITNIF-S this is a limited liability company that has been formed in conjunction with nw Energy Systems to commercialize the technology developed by ITN Energy Systems. The company has technology that deposits materials onto semiconductor wafers 7 and it has developed a Thermal Engine which converts energy from waste water into mechanical energy.
Our Analysis
Rentech originally, with the i@ion of $25 million from Public Service of Colorado (NcE,4NYSE); developed and proved the commercial viability of its gas to liquids technology in Pueblo, Co. for operations in conjunction with the gas produced &om a landfill site, Unfortunately the landfill was unable to supply the needed amount of natural gas for the plant to operate on a full time basis. The company is in the process of successfully making the transition to using other forms of supply of the needed raw materials. In addition to this it is in the process of implementing a succes@l licensing strategy.
The company is in the process of positioning itself to be the dorfaant player in the gas to liquids industry through its use of iron as a catalyst. Iron is less expensive to use than cobalt, and allows for a wider variety of feed material to be used from which the Hquid products are converted. Rentech receives a royajty for every barrel produced with its proprietary process. This provides Rentech with a clear economic advantage over those companies.
T.f the company is succenu in its negotiations with Texaco then the fmancial picture of the company should improve dramatically. Successfully licensing this technology to Texaco would pave the way tor possible additional agreements with almost every company that does not have a gas-to-Hquids technology of its own and tWa covers most of the companies involved in the petroleum re&bg process any where in the world. 'ne potential for this is very impressive.
In addition to this the company has a very promising product in its Thermal En@e. The main nwket for this product would be developing countries that do not have adequate access to the power supplies that they need. It is estimated that one million units of this Thermal En@e could be sold in India alone.
Our Recommendation
I view Rentech as an excellent aggressive growth opportunity. The company is moving from the preproduction stage @ full production through its licensing strategy, As the revenue and earnings for the company increase the shares of Rentech should reward those who have invested into it at the current stage. I am initiating coverage of the company with a BUY Rating.
Notice of custom research
Sterling Investment Services, Inc. is an independent investment management and research &m. Sterling Investment Services publishes four different newsletters. Three of which are broadcast on a @ghtly'oasis.
Additional information on these newsletters can be obtained from our web site at www.sterlingirive@ents,com'. Sterling Investment SeMccs, Inc, was paid a consulting fee in conjunction with the produ on of this report.
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