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Microcap & Penny Stocks : Rentech(RTK) - gas-to-liquids and cleaner fuel -- Ignore unavailable to you. Want to Upgrade?

To: ForYourEyesOnly who wrote (1416)	2/24/1998 9:45:00 PM
From: froland	Read Replies (1) \| Respond to of 14347

THC: Don't forget Catalytica froland

To: ForYourEyesOnly who wrote (1416)	2/28/1998 12:21:00 PM
From: G. Scott	Read Replies (4) \| Respond to of 14347

Dear THC Sorry I've taken so long to respond, but here's what I think about what's happening in the GTL business. I am in the gas business in eastern Ky. and have seen the prices slide all over the board, but I've never seen them low enough to make GTL commercially viable domestically. It seems it takes 100K/cft(+or-) to make one barrel of liquid hydrocarbons. Let's do the math. Even at a very low $1.00/Kcf, it would take $100.00 worth of gas to create 1 barrel of liquid hydros worth about $30.00. So, it seems to me that the only gas that will be utilized on a major scale will be very large reserves that are very remote. That brings us to lots of other problems. Usually remote areas are environmentally sensitive. You would probably have to build a road to get your equipment in and your product out. Most large reserves that are remote are proved up, but don't have very many wells drilled or any system of pipelines to any central spot. You would have to build your plant from the ground up. It seems to me that any such project would take a long time, lots of studies(do we really want cobalt out there in the wilds?), and a huge infusion of capital. Meanwhile, we have RNTK, which has its iron-based technology which is capable of utilizing a myriad of feedstocks. By being able to use refinery-bottoms (petroleum cokes, tar and bitumen, aka "the heavy goop at the bottom of the barrel") RNTK's process can be more quickly and cheaply utilized at existing refineries (of which there are 100's in the US alone). As the world rapidly uses up its supply of "light sweet crude", this technology will become more and more important. RNTK says that they can also use coal in their process. I know that there are vast sources of coal in this country that are not used because of either their location (ie.Wyoming) or their high sulphur content or both. The good news about these potential feedstock sources is that they are domestic and near already constructed transportation. What I see is TX retrofitting a few of their refineries with RNTK reactors using refinery bottoms as feedstock. If they indeed see the kinds of returns in profits as outlined by Dennis Yakobson in his speech to the Bloomberg Conf, then we will see large amounts of business thrown our way. There are lots of small refiners out there that could use a few million extra in profits each year. To answer your origional question, I think RNTK will at first be in the "bottoms" business. Then, if their technology is as good as advertised and it is proven they can derive the same amount of product from natural gas without using a toxic, corrosive catalyst, they have a chance to become a major player in the pure GTL field in the future. Finally, it seems to me that TX's commercials on TV have been about finding, utilizing more fully and being environmentally friendlier when dealing with oil reserves. Sounds like a match made in heaven to me. Keep the Faith. G.Scott