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Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper -- Ignore unavailable to you. Want to Upgrade?

To: GC who wrote (1645)	5/30/1998 10:41:00 AM
From: Jeff Harrington	Read Replies (1) \| Respond to of 4142

The next question.... I don't want to do that kind of projection. It makes my nose bleed. My wife was reminding me last night about how Exxon had practically destroyed my Dad with a patent fight. He's happily retired now after 20 years in court against Exxon (he was US Forest Service scientist who got a patent with government approval of a chemical process he came up with on his own free time). They dragged it out for 20 years until he didn't care any more and settled for a truck. (He got $20,000 in a lump settlement and walked into the Chevy dealer in Missoula, Montana and told them he wanted their best red truck and he didn't give a damn about the real price he had $20,000 in cash and he wanted a truck. Drove off with the best one on the lot). The patent in question was for stripping pine trees of their oleoresins (a renewable petrochemical substitute) before harvesting the trees as timber. It would have been a market of tremendous proportions and Exxon knew it was just one guy and they could screw him by spending a million bucks to stop him. Anyway, sorry for the offtopic, just a poignant MIDL moment... JH

To: GC who wrote (1645)	5/30/1998 11:54:00 AM
From: John Algermissen	Respond to of 4142

You can get a lot of the information you are asking about from the Arcon web page at stockstowatch.com (Each of the 9 drops at the bottom of the page are links to other pages) To quote a little: MARKETING STRATEGY At the outset, Arcon will focus its marketing efforts on the DF-144 additive to be sold to major gasoline blenders. As the business matures, additional products as well as custom processing will enhance the profitability of the Company. The first targeted market for the octane enhancer is the large volume of reformate produced by refineries requiring octane enhancements to produce reformulated motor gasoline. The market for DF-144 when blended with reformate is estimated to be 350,421 barrels per day in the Continental U.S. The Houston, Texas region produces over 530,000 barrels per day of reformate, which when blended with 10% DF-144 yields a market for the octane enhancer of 53,000 barrels per day. The Dallas Metroplex yields an additional amount of about half that of the Houston Market. Arcon will locate processing plants in various locations to serve the regional markets. While orders are being negotiated, Arcon will build its first DF-144 processing plant in the Houston, Texas area. The plant will be capable of producing 100,000 gallons per day of octane enhancer supplying the Houston regional market. The U.S. gasoline market is 332,000,000 gallons per day. DF-144 will certainly earn a major share of that market. The two year plan calls for adding seven more plants starting tin the summer of 1998 through the year 2000. These plants will add capacity of approximately 2, 450,000 gallons of DF-144 production per day. OCTANE PROCESSOR CAPABILITY By varying the composition of the feed, the Octane Processor can produce many products. In all cases, however, ethanol must be one of the feed components. Some of the various feed and the resulting products are: Other Ethanol % Hydrocarbons Product Blend Value 1.) 38 % 62 % 134 to 168 Octane 2.) 100 % - 0 - 165 Octane The Octane Processor is capable of producing high octane aviation fuel as well as high octane designer motor fuels for racing and high performance. Over 200 tests using different feed stocks have proven the process can produce products with octane as high as 165 for refinery additives, high octane gasoline for aviation and marine use and high grade gasoline. ECONOMICS MTBE has a blending value of 108 octane and sells for a contract price of approximately $1.30 per gallon. The typical octane blend value for high-grade ethanol is 113-115%. We have developed a process through our worldwide patented plants to take standard ethanol and increase its octane blend value up to 165%! This is a 52 point increase or almost 60%! Ethanol sells for $1.20 per gallon with 115% blend value. We plan to sell DF-144 for $1.20 per gallon. It's easy to determine the cost savings for 60% higher blend value for a price of 10 cents per gallon less!! A typical refinery or blender would use on a daily basis, the following DF-144 additive amounts: a small refiner/blender - 100,000 gallons per day. a medium refiner/blender - 400,000 - 800,000 gallons per day. a large refiner/blender - 1,000,000 - 1,500,000 gallons per day. The cost to produce DF-144 is approximately .80 cents per gallon, while the selling price is $1.20. The use of DF-144 by refiners and gasoline blenders offers much better price performance than MTBE, in addition to greatly reducing the environmental hazards. Projections indicate that gross annual sales for each plant will be approximately $150,000,000 with a gross margin of $32,000,000 and net before taxes of $20,000,000. All plants will operate as separate profit centers. Continuous expansion will occur in an orderly fashion as market penetration and demand increases and new markets are developed. We plan for 4 plants in 1998 and 4 in 1999. However, some regional expansion areas such as California could require up to 15 large plants to satisfy the market. With the World rights and patents for DF-144, the Company has the potential to reach $1 Billion in sales by the year 200 with only Two percent of the market! U.S. demand alone for gasoline is 332 million gallons per day. A typical blended gasoline will be comprised of 12% - 24% DF-144, representing an impressive potential market. Based on Arcon's planned growth to eight units over the next two years, with each unit capable of producing 350,000 (plus) gallons per day of additive. Revenues generated from the domestic and international markets can easily reach a billion dollars per year by the year 2000!