**OT** Question regarding ENBC:
ENBC is another company which has a revolutionary technology that could turn into a huge market. They went public in a boom, signed up a number of high-profile partners, and have come down a lot due to the time it has taken to get the technology near commercialization. The same thing could happen to SLHO as people see it will take time to get revenues from GTL.
Would you be so kind as to check Bob Czeschin's past reports to see if he has mentioned ENBC? They are in negotiations with Petro Star (Alaska) now for their first commercial project. Please let me know what Bob thinks.
I am posting a business summary, and an outline of their alliances.
Thanks in advance for your help.
Business Summary:
The only competion faced by ENBC is by conventional existing
processes (HDS or Hydrodesulfurization). ENBC's technology,(BDS
or Biodesulfurization) is more efficient- BDS systems cost about
half as much as HDS systems and operating costs are 10 to 30%
cheaper with BDS.
Note: for general info on BDS and Company check out their web
page -very informative: energybiosytems.com
Paraphrased from Seidler Report:
Potencial contracts within 12 months:
Total Raff: 2units, 20,000 barrels/day $2,000,000-$2,500,000 site
license fee and $12-$14 million annual service and biocatalyst
revenue.
Carbide/Graphite: 1 unit, 4-5,000 barrels/day $400,000 site
license fee and 4 million annual service and biocatalyst revenue.
PetroStar: 1 unit, 5-8,000 barrels/day $500,000 fee and $1.8
million annual service and biocatalyst revenue.
The first six contracts would potentially generate site license
fees of 10 million and recurring revenues of approx $43 million.
Potential:
Diesel and middle distillate fuels (currently a 15 million
barrels/day market)-
$675 million in annual revenues if ENBC captures only 10% of this
market. (the company has estimated that diesel will be a 1
billion market for BDS)
Crude oil niche market-
over 200 million
Gasoline with refining capacity of 7.6 billion barrels/year-
$950 million of annual revenues if ENBC captures only 10% of this
market.
If ENBC taps into portion of total petroleum industry refining 22
billion barrels/year-
revenues would exceed $2 billion
ENBC expected to commercialize BDS process for diesel
fuel,expects to add gasoline within next 3 yrs, followed by crude
oil within the next 5 years.
Potential market valuation of over 150 million or 12/share soon
after achievement of first commercial success(FIRST QUARTER 1998)
Capturing only 2.5% of the diesel market, company could generate
over 180 million in sales and based on 2001 est earnings of 2.76,
stock price range 60 within next 3 yrs.
STRATEGIC ALLIANCES
Energy BioSystems has entered into alliances with potential customers and
suppliers in support of its biocatalytic desulfurization (BDS) development
and commercialization activities. These alliances give the Company an
opportunity to build upon established expertise and resources in areas
critical to its success. The Company expects that these strategic alliance
relationships with potential customers will enhance its ability to sell
BDS units. Alliances with recognized industry suppliers are expected to
facilitate commercialization of the BDS technology.
STRATEGIC ALLIANCES - CUSTOMERS:
TOTAL RAFFINAGE DISTRIBUTION, S.A. (Contract: July 1994)
Total is a leading international oil and gas company based in France with
upstream and downstream operations in 80 countries and more than 900,000
barrels per day of refining capacity.
Alliance Goal:
* Develop first commercial BDS unit for diesel fuel
* Provide entry into the European desulfurization market
Terms:
* Total: Provides target diesel stream, builds and operates a pilot
plant and commercial unit located in France at its own expense, based
upon success of St. Louis pilot plant results; contributes resources
to BDS development program
* Energy BioSystems: Develops biocatalyst and processing system for
specific Total application, focuses on Total diesel for primary
development program, provides preferential terms to Total on initial
commercial sales
TEXACO EXPLORATION AND PRODUCTION TECHNOLOGY DEVELOPMENT (Contract: July
1993)
Texaco Exploration and Production Technology Development is a group within
Texaco Inc., one of the largest integrated oil companies in the world.
Texaco has proven reserves of more than 2 billion barrels, including large
reserves of high-sulfur crude.
Alliance Goal:
* Develop BDS process for crude oil
* Provide additional petroleum engineering and analytical resources to
the development effort
Terms:
* Texaco: Chooses target crude oil, contributes crude oil expertise,
field operations and analytical chemistry support
* Energy BioSystems: Performance improvement of the biocatalyst for
Texaco's specific crude oil
* Joint: Process engineering
KOCH REFINING COMPANY (Contract: December 1993)
A subsidiary of Koch Industries, the second largest privately held
corporation in the United States, Koch Refining Company is involved in
virtually all phases of the oil and gas industry, as well as in chemicals,
chemical technology products, hard minerals, real estate, and financial
investments.
Alliance Goal:
* Develop a BDS process for gasoline stream application
* Provide additional refinery engineering and operations resources to
the development effort
Terms:
* Koch: Chooses target gasoline stream, contributes refined product
expertise, refinery operations support and product quality testing
* Energy BioSystems: Performance improvement of the biocatalyst and
processing system for Koch's specific refinery stream application
STRATEGIC ALLIANCES - SUPPLIERS:
The M.W. Kellogg Company (Contract: September 1994)
M.W. Kellogg is an ISO 9001-certified, international technology-based
engineering and construction contractor, serving primarily the
hydrocarbon, chemical and energy related industries. M.W. Kellogg is a
wholly owned subsidiary of Dresser Industries, Inc., a major supplier of
highly engineered products and services primarily used in hydrocarbon and
energy-related activities throughout the world.
Alliance Goal:
* Provide recognized basic engineering expertise on BDS units worldwide
* Accelerate BDS commercialization through M.W. Kellogg's experience in
pilot plant scale up and process design
Terms:
* M.W. Kellogg: Serves as an engineering partner to Energy BioSystems
during completion of BDS development and exclusive provider of basic
engineering packages for commercial units
* Energy BioSystems and M.W. Kellogg share in the proceeds of site
licenses
Petrolite Corporation (Contract: March 1992)
Petrolite Corporation is a refinery services company that has participated
as an integral part of worldwide refining and oil production industries
for more than 80 years, serving customers in every major refining and
production region. Petrolite's research and development capabilities
include process engineering, emulsification, and separations and
analytical chemistry.
Alliance Goal:
* Provide substantial development resources-research funding,
separations technology
* Build and operate a BDS pilot plant-Petrolite facility
* Provide field service to maintain units and assure customer
satisfaction
Terms:
* Petrolite provides $5.4 million in development funding and an
additional $1.5 million for construction of BDS Pilot Plant
* Petrolite guarantees to service BDS units
* Petrolite participates in the profitability of BDS sales |
